This came as little surprise to most in the industry, which has come to grips with the idea that credit is going to remain tight for some time. Indeed, in an informal survey by GlobeSt.com it was difficult to find anyone with a positive projection.

Commercial real estate prices are practically in free fall, Neal Elkin, president of Real Estate Analytics LLC, tells GlobeSt.com. Prices from April 1 to May 30 dropped significantly, he says, citing REAL/Moody's Commercial Property Price Index. "In April we showed pricing fell 8.6% month-on-month. In May it was 7.6%, which is not as severe as April but still fairly significant."

There is no evidence to indicate any kind of stability in commercial real estate prices, Elkin concludes. In fact, he says CRE is falling further in price declines than the residential market. The CRE market is doubly damned right now--linked to both the greater economy and the ongoing credit crunch, many point out.

Despite all the talk of 'green shoots' and economic improvement, it is likely that CRE will suffer for a significant amount of time, Maura O'Connor, partner in the Real Estate Practice Group at Seyfarth Shaw LLP, tells GlobeSt.com.

"There is nothing to increase demand: the continuing high rate of unemployment, and the fact that so many people overleveraged themselves through home equity extraction [and must either repay that money or have their houses foreclosed upon] means that consumer demand, which drives our economy, is way down."

In addition, the death of the CMBS market has wiped out about 40% of the financing capacity that was used to fund CRE. That means that over the next few years, unless an alternative source of funding is found, many CRE projects will be subject to maturity defaults, she notes. "I expect to see a lot more defaults, workouts and foreclosures--especially as the banks move toward recovery because of the massive federal bailout, which will improve their capital reserves and will allow them to move forward to recognize their losses and foreclose on their troubled CRE loans slowly over time."

In fact, O'Connor concludes, "based on what I'm seeing, that CRE has not yet absorbed the brunt of the recession, and will likely continue to get worse over the next couple of years, until much of the CRE market has been significantly repriced downward."