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NEW YORK CITY-Over the course of a 17-year period, securitized commercial real estate loans in default have generally been smaller balance. That is changing as larger CMBS loans from 2005 through 2007 run aground, Standard & Poor’s says in a new report. The study also predicts that the peak of defaults will be farther in the 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 and co-author of the study, tells GlobeSt.com. “That, coupled with the high vacancy rates and the severity of the recent recession, means it could take even longer” than the 25-month lag between the end of the 2001 recession and the peak of annual loan defaults.

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