WASHINGTON, DC-Ever since the start of the residential housing crisis, the commercial real estate industry has been waiting for the other shoe to drop: that is, for the defaults to hit their sector. According to the Distressed Asset Recovery Team, a new consultancy consisting of Delta Associates, Beers+Cutler, Fore Consulting, and Blackwell Advisors, that moment is at hand.

The group reports that the total value of distressed commercial real estate in June 2009 was $97.4 billion–twice the $49 billion of March and four times that of December at $25.6 billion. Retail properties, not surprisingly, represent the largest segment in June, at $29.7 billion, boosted by General Growth Property’s recent bankruptcy filing and retailing’s sector malaise. Other asset classes, as well, also showed deterioration in fundamentals: even office properties, which recorded the smallest increase, was up 33% to $15.3 billion.

Much of this story is playing out on a location by location basis. The report finds that the Manhattan market has the highest volume of distressed real estate assets, followed byLos Angeles-Orange County. Miami, with $482 in distressed commercial property per capita, has the highest ratio per capita. Data in this report was derived in part from Real Capital Analytics.

Even the DC area–which is relatively strong–is experiencing its share of defaults. For example, Principal Life Insurance Co. has been forced to foreclose on 13857 McLearen Rd. in Herndon, VA, after ING Clarion Partners failed to secure a tenant, the report noted, citing news accounts. Also, General Electric Credit Equities retained ownership of 12930 Worldgate Dr., also in Herndon, after MGP Real Estate purchased the building in 2007.

In an earlier interview with GlobeSt.com, Greg Leisch, principal of Delta Associates, estimated that the DC area will see $4 billion in commercial real estate defaults by the end of the year, primarily by developers that were unable to refinance. The area will be among the first to recover, he believed–but first must navigate some rocky times.