The collapse in commercial real estate prices is preventing Federal Reserve Chairman Ben Bernanke from declaring that the economy and financial markets are healed, Bloomberg reported.



Property values have fallen 35 percent since October 2007, according to Moody’s Investors Service. That’s making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls and hotels this year, pressuring companies to put buildings up for sale.

The industry is likely to be high on the agenda when Bernanke and his colleagues sit down Tuesday in Washington for the Federal Open Market Committee meeting on monetary policy.

Lawmakers including Reps. Barney Frank and Carolyn Maloney are pushing the central bank to extend an aid program designed to restore the flow of credit.

If non-residential real estate remains in the doldrums, the Federal Reserve may be forced to leave emergency-lending programs in place and keep its benchmark interest rate close to zero for longer than some investors expect, given positive signs elsewhere in the economy.

Commercial property is “certainly going to be a significant drag” on growth, said Dean Maki, a former Federal Reserve researcher who is now chief U.S. economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays plc. “The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis.”