CMBS Defaults
Here is a reprint in its entirety of a Dow Jones News Wire article, published on WSJ.com, discussing Moody's findings on CMBS defaults:

Delinquencies among U.S. commercial mortgage-backed securities surged to by a record amount in September, according to Moody's Investors Service, highlighing the ongoing woes on the commercial real-estate market.

Occupancy rates and rents are falling, which, coupled with an inability to refinance debt, is resulting in an acceleration of woes for property owners. "After tapering off for two months, the delinquency tracker appears to have resumed an upward trend as expected," said managing director Nick Levidy. "The delinquency rate is likely to continue moving higher over the next several months as troubles compound in the commercial real estate sector."

September's delinquency rate of 3.64% compares with 0.54% a year earlier.

The commercial real estate market had held up better than the residential real estate market until it began to deteriorate quickly at the end of 2008 as the U.S. recession deepened. Retail and hotel properties have been hit especially hard.

The hotel industry posted the largest increase in September, rising to 4.97% from 4.18% in August. Multifamily delinquency rates continued to go up, climbing to 6.09% from 5.51%, the highest of any property type. The delinquency rate for loans on retail properties rose one-third of a point to 3.76%.

Moody's said delinquency rates continued to be highest in the South at 5.14%, up from August's 4.66%. The East was the only region with the delinquencies below the national average - with a rate of 2.14%, up from 1.84% a month earlier.

Arizona, Michigan and Nevada all have delinquency rates nearly three percentage points higher than any other state, with rates of 9.32%, 9.29% and 9.14%, respectively. Ohio was the next highest, at 6.22%.

CMBS was the prevalent form of commercial real estate financing from the early 2000s until the credit crisis started in late 2007 and CMBS stopped cold. The fate of the CMBS market will mirror commercial real estate. I have read research reports expecting the default rate to approach 6% to 8%, close to double the current rates.