So this ties to what I have been saying in some previous posts.
Private Equity investments (due to getting a BOATLOAD of investment $$$ from foreign investors) soared in the 2002-2007 period. Many of these investors, such as Cerberus with Chrysler (mentioned before), have made some bone headed investments. We can also add mortgage industry related investments as well.....
Private Equity came into the commerical real estate market over the last few years and really drove up real estate prices. Unlike REITs they leveraged their balance sheet (REITs have structural impediments in their business model (with leverage) due to paying out a HIGH percentage of income each years as dividends.)
As businesses lose access to credit and experience weak economic conditions many will fail. This will then cause commercial real estate losses (ie. unoccupied retail space at malls/strip malls.)
On top of this, think about all the consolidation in the banking space right now. Do you think all these banks will be occupied 2 years from now? In Dallas we have some corners where there are 4-6 banks on four corners of a shopping center. Heck, I have seen ONE corner in Plano, a northern suburb of Dallas, where there are FOUR major banks operating. I'll post a picture/update in the near future.
It takes awhile for industry specific buildings (banks with vaults/layouts, drivethrus) to be re-purposed into some other industry. Someone has to come up with a creative idea for re-using the space and then that industry/concept leases/purchases those assets, typically at a SIGNIFICANT discount versus what the primary industry was using them for. The classic example of this is OLD MOVIE theaters. Many were turned into stadium seating type theaters or dining theaters (where you eat/watch movies at the same time.) Many former Food Lion grocery stores were turned into postal offices, Laser Tag (whirlyball places), salvation army centers and other concepts after they had to close down TONS of locations in the early 90s.