There is a growing risk of defaults on loans on commercial property this year, in a trend that could spill over into tumbling values and create more jitters in the credit world, analysts and bankers warn. Financial Times

US property companies that took out big short-term loans to finance acquisitions in the past couple of years at low-interest rates are now struggling to refinance this debt, as banks curb lending and commercial property prices fall.

In recent days, Harry Macklowe, the New York developer, has failed to refinance $5.8bn (£3bn) in short-term loans he used to buy seven Manhattan office towers from Equity Office Properties last February. Deutsche Bank, which provided the loan, has taken control of the buildings and will put them up for sale, a person familiar with the matter said.

Analysts warn of a pattern that could spread. US commercial property prices have fallen 10% in some markets since August, after rising more than 90% since 2001, according to Real Capital Analytics.

'For [recent] loans coming to maturity this will be very difficult to acquire refinancing,' said Sam Chandan, chief economist at Reis, a property research company.

Signs of growing stress also exist in the UK commercial property sector. Tomorrow, UK group British Land is expected to announce a sharp writedown in the value of its commercial property.