The problems in the real estate market has been largely confined to subprime loans and ARM mortgages, but some are now fearing the commercial developers may begin to feel the heat. Previously, these loans were considered "safe" in that they are backed with operating and rent income, but now that these numbers are declining, banks are finding themselves in trouble. The credit crisis has many concerned that less companies and people will be willing to rent offices and homes, which may prompt an increase in defaults for commercial real estate loans. This could in turn cause more banks to fail in the coming years and make loans for everyone much harder to obtain.

From BusinessWeek:
Loans to homebuilders and other developers are the latest slice of the credit market under duress, and analysts say banks could face hundreds of millions of dollars in losses as a result. As commercial and residential real-estate prices decline, banks of all sizes face a growing number of loan defaults from builders unable to sell houses, and from developers whose malls and other properties turned out to be less desirable than anticipated.