by David Fessler, Advisory Panelist

There’s another shoe that’s quietly starting to drop in the commercial real estate sector… one that could deal a fatal blow to some of the largest banks like Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) and most of the other big boys in the news for the last year.

But you wouldn’t know that by looking at the headlines…

Earlier this week, Goldman Sachs announced a huge upside surprise in earnings, a $5 billion share offering, and its intention to pay back federal TARP funds ASAP.

The average investor might view this as a sign that things are returning to normal in the banking sector, and be tempted to start shoveling money back into banking stocks.

Let me suggest you wait a while. “A fool and his money are soon parted,” as the old saying goes.

Put another way, if you think a one-month rally in the stock market can begin to erase a financial crisis that’s been going on for the better part of two years now, I’ve got some great Florida swampland for you.

Yesterday morning investors got a taste of what lies ahead as General Growth Properties filed the biggest real estate bankruptcy in U.S. history. The impact of a commercial real estate collapse will continue to ripple across the markets, and it’s why we need to take a closer look…

Commercial Real Estate: Sad State of Affairs & Getting Worse

It’s no surprise that the market for commercial office space has come to a crashing halt. Last year, commercial real estate sales fell off a cliff, plunging 73%, according to data from Real Capital Analytics.

But it’s going to get worse… much, much worse.

At the end of last year, the vacancy rate for commercial office buildings was 14.5%. This year it’s expected to hit 16.7%, as more and more companies and individuals file for bankruptcy.