Before you start getting short the IYR (The CRE ETF), or heaven forbid going long the SRS (2x short of IYR index) at least understand the underlying dynamics here;
1) Your first tell should be that the IYR is currently in the 30's ...down from a high in the eighties. Even if your thesis is that the average piece of commercial real estate will see it's cash flow, value, etc cut in half consider that IYR's price already KNOWS that...remember the stock market has an excellent track record of looking ahead.
2) Consider that the IYR is not made up of your typical local real estate yuppie investor, over-leveraged, overly greedy, and unable to refi. The IYR is instead made up of very LIQUID PUBLICLY TRADED COMPANIES ( Simon Property Group,Boston Properties, Public Storage, Vornado Realty, Annaly Capital by themselves represent over 30% of the IYR index - ALL strong franchises and easily able to raise funds as needed, or wanted.)
3) Consider that should the bulk of these companies be not able to refi, the group as a whole would likely be classified as a 'catastrophic' asset class (Think BACKSTOPPED), eligible for everything the Obama administration has afforded the other banking institutions.
4) Lastly, for those locked out of the credit market that are over levered, and likely mom and pop regional guys NOT represented by the IYR consider the following; These larger IYR component companies will benefit by buying Johnny Local's properties on the cheap. Debate me on Stocktwits? I am @A_F