An analysis of nearly 34,000 fixed-rate loans in U.S. commercial mortgage-backed securities shows that 13.7% have a debt service coverage ratio of less than 1.0 — a strong sign of financial weakness. Based on its findings, New York-based research firm Trepp LLC expects the percentage of CMBS loans in special servicing to continue rising from 11.7% through May to as high as 20%.

If realized, that could result in $75 to $80 billion in troubled loans headed for special servicing on top of the $82.8 billion already occupying that spot. Trepp officials don’t expect the default rate on CMBS loans to peak until mid-2011.

To put it in perspective though, read this portion:
Of the $44.6 billion in loans that are considered current but have a debt service coverage ratio below 1.0, approximately $35.7 billion, or 80%, were generated from 2005 through 2007, a period marked by lax underwriting standards. “During this time, pro-forma underwriting painted a rosy picture of future property fundamentals and valuations,” according to Mancuso.
I can tell you that $35.7 billion being rewritten to 60% of it’s appraised value isn’t nearly bad enough to make me lose sleep at night.