SiliconBeat

The head analyst of commercial mortgages at Deutsche Bank Securities told Reuters today that commercial real estate markets in the U.S. cities could fall as much as 50 percent from their peak in 2007 and that they probably won’t recover until 2017.

“The froth is still working itself out,” said Richard Parkus, Deutsche Bank head of Commercial Mortgage-backed Securities and Asset-Backed Securities Synthetics Research at the Reuters Global Real Estate Summit in New York. “We are currently in something which is comparable to what we saw in the 1990s and potentially worse.”

Asking rents in New York City are down about 28 percent according to Parkus, but factoring in free rent and other perks by landlords, rents are down about 50 percent, he estimated.

The U.S. commercial markets are deteriorating at an increasing pace as rent dries up and demand plummets, the Reuters article stated. That is leaving borrowers struggling to make their monthly mortgage payments.

“We are not only not approaching stability, we are at a period of maximum deterioration,” Parkus said.

In Silicon Valley, office space for lease as been trending up since hitting a post dot.com bust trough of just under 8 million square feet in August 2007, according to figures from Colliers International. As of May 1, that figure has nearly doubled to 15.9 million square feet.

Research-and-development space in the valley has yet to be hit as hard in the current downturn, but the amount for lease has risen in five of the last six months since hitting a post-bust low of 26 million square feet in October. That has since risen to 29.9 million square feet in February and stood at 29.5 million square feet as of May 1.