Fears that commercial real estate is heading for a complete meltdown are fading -- especially in light of recent first-quarter results of bank-holding companies. Troubled loans are moving through their books and the pace of nonperforming loans is slowing. "These improved short-term losses are due primarily to two factors," said Mark Fitzgerald, senior debt analyst for CoStar Group. "First, signs of an improving economic environment have decreased loss expectations. Second, some write-downs have simply been pushed forward, as external factors, including low interest rates, have enabled banks to push off distress into the future."

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