A commercial real estate crisis in the U.S. is looming over the next two to three years, as at least $1.5 trillion in commercial mortgage debt issued over the past decade becomes due, cautioned industry practitioners speaking at the National Association of Real Estate Editors conference in Denver.

The panelists—Bill Hoffman, chief executive officer of Trigild in San Diego, California; Bob Jacobs, chief investment officer of the Broe Group in Denver, Colorado; and Marcel Arsenault, chairman and chief executive officer of Real Capital Solutions in Louisville, Colorado—each of whom specializes in the acquisition and sale of distressed assets, pointed to similar factors affecting the commercial industry as those that brought down the residential industry. They see a flood of relatively inexpensive capital being made available to purchase properties at inflated prices. While dwarfed by the residential mortgage meltdown that involved trillions in bad loans and unprecedented home foreclosures, the pending commercial mortgage reset could have a significant impact in that it likely will reverse the recovery starting to appear in some commercial property sectors and send the industry back into a downward spiral, the panelists said.

Hoffman characterized the current commercial industry downturn as “deeper and longer” than the bust of the early 1990s, during the collapse of the savings and loan industry. “I am not sure that it will get better for some time because of all the notes that are coming due,” he said. Hoffman’s estimate for the start of a sustained commercial recovery: 2016, after most of the commercial assets now being held by lending institutions are repriced, sold, and placed back in circulation.

“There is more pain to come,” said Jacobs. While the amount of commercial property that is being foreclosed upon is not a “high profile story,” he noted that “it is happening,” as increasing numbers of owners hard hit by the recession are unable to pay their loans. In many cases, they find themselves underwater on their mortgages. As yet, more foreclosed properties are being held than sold, as lenders hold out for higher values, he said.

“Putting assets in a deep freeze does not make them go away. It will take years to work all of these [commercial properties] through the system,” Arsenault said.

While some segments of the commercial industry are showing signs of a recovery, the uptick could be false and short-lived until the worst of the mortgage fallout is over, panelists noted. “Recognizing the true value is the only way that a true recovery will start,” Jacobs said. “Until that happens, there is no way to clear out the assets. There is capital waiting to buy assets when they are correctly priced. But, as yet, the true value of too many properties is still an unknown.”