Sign "O" the Times

(Chart courtesy

(Chart courtesy

Commercial real estate looks like another bubble ready to pop:

Fitch rates Commercial Mortgage Backed Securities. So it warned: “CMBS cannot afford a repeat of the 2008-2009 experience.”

Commercial property prices in the US rose 1.1% in August from July, and 10.2% from a year ago, according to the Green Street Commercial Property Price Index (CPPI).

They have soared 95% from May 2009 and are now 19.3% higher than they’d been in September 2007, the peak of the crazy commercial property bubble that collapsed spectacularly during the Financial Crisis.

“While commercial real estate values have continued to move higher, the pace of appreciation has slowed compared to earlier in the year,” Green Street Advisors explained to soothe our nerves.

The chart shows how much smaller the prior bubble was than today’s monster. And it wasn’t a bubble either until after it had imploded, collapsing to 2004 levels and taking down CMBS bonds with it. Then the Fed reflated the whole thing to its current glorious state.

How many times can we ride this roller coaster?