NEW YORK CITY-Over the course of a 17-year period, securitizedcommercial real estate loans in default have generally been smallerbalance. That is changing as larger CMBS loans from 2005 through2007 run aground, Standard & Poor’s says in a new report. Thestudy also predicts that the peak of defaults will be farther inthe future than in previous downturns.

“Unemployment is expected to remain elevated in the near term,at levels higher than we’ve seen in the two previous recessions,”S&P’s Larry Kay, director of structured finance ratings andco-author of the study, tells GlobeSt.com. “That, coupled with thehigh vacancy rates and the severity of the recent recession, meansit could take even longer” than the 25-month lag between the end ofthe 2001 recession and the peak of annual loan defaults.

Assuming two years-plus since the technical end to the recessionin June 2009, that could mean defaults continuing to crest wellpast the midpoint of next year, especially as the jobless rate isexpected to remain high into 2012.