Trade groups representing developers and commercial lenders are lobbying Congress for a bailout. They are saying that $530 billion dollars of CMS's (commercial mortgage backed securities) are coming due in three years and $160 billion dollars are coming due next year.

The kinds of buildings involved include office complexes, hotels, shopping centers and other commercial buildings. Much like home mortgages, these CMS's were bundled together and sold to third parties and just as the market for home mortgages collapsed, so too this market's refinancing has all but come to a standstill.

Delinquency rates, though quite low, have been rising up to .96% in November from .62% in September. Some analysts predict this will rise to 2% by the end of 2009.

We now have a new financial dilemma. Congress and the Administration were reluctant to bail out the auto industry. The question again is: should we do this for commercial lenders as well?

The New York Times reports that since we've had such a catastrophic run with home mortgages, it's time to watch the collapse of commercial ones. The same names surface when it comes to the collapse of our financial system -- in the case of commercial mortgages Deutsche Bank (NYSE: DB) ($25.1 billion), Morgan Stanley (NYSE: MS) ($22.1 billion), Lehman Brothers (NYSE: LEH) ($40 billion in commercial mortgages and property), and Citigroup, Inc. (NYSE: C) ($19.1 billion) are among the biggest holders. They are also big names in Auction Rate Securities (ARS).

Why do people think that commercial real estate could be tanking? Here are four reasons:

• Declining property prices. The Times reports that the Moody's/REAL Commercial Property Price Index has dropped 12% since its peak last October.
• Commercial mortgage write-downs. According to the Times, Morgan Stanley reported commercial mortgage write-downs of $400 million and Wachovia (NYSE: WB) said it would take at least $1 billion worth of such write-downs.
• Potential Riverton default. The Times reports that Riverton, a 1,230 unit Harlem development, was premised on the idea that developers could convert "lower-priced rentals to apartments priced closer to the higher market average." But the Times reports that Monday Fitch "issued a negative watch on part of the Riverton Apartments trust" since the developers had not made much progress -- threatening commercial mortgages that Citi and Deutsche Bank hold.