The default rate on commercial mortgages held by US banks will rise to 5.4% in 2011, the highest since at least 1992, as banks anticipate more losses amid falling rents, according to Real Estate Econometrics.

The property research firm increased its projected default rates for 2009 to 2011 amid declining occupancies and incomes at hotels, shopping malls and office buildings.

Defaults will rise to 4.2% this year and 5.3% next year before peaking at 5.4% in 2011, the New York- based firm said. Previously, it estimated rates of 4.1 percent this year, 5.2% next year and 5.3% in 2011.