The biggest challenge facing the real estate industry in 2010 is...

The biggest challenge facing the real estate industry in 2010 is.... The biggest challenge facing the real estate industry in 2010 will be a wave of loan defaults which could last several years. Many commercial real estate loans will mature, and owners will need to either make a fast sale or refinance their buildings. These properties which unfortunately will be defaulted on will sell either as notes to potential buyers, or in cases of foreclosure, a fee simple transaction at a "discounted" price. Overall, in 2010, banks will remain conservative in their lending. Also, previously issued construction loans will be in risk of default caused by the developers who took advantage of these loans and won't be able to finish development or pay off their balances. Loan defaults, unfinished developments, and the conservative lending practices will further be affected from the economic slowdown including unemployment rates that keep rising. Increased vacancies, a decrease in consumer spending, and an increase in available space/apartments will inevitably cause rents to drop further and sale prices to come back to reality. Inbal Himelblau is an independent broker, New York, N.Y.