Commercial R.E. following residential over the ledge

I have been warning for almost two years now that commercial real estate sales, prices, and construction activity would likely follow the residential real estate sector over the ledge. That appears to be unfolding now.

Case in point: The American Institute of Architects index of billings activity at firms that design commercial buildings. It dropped to 36.2 in October from 41.4 in September and 53.4 in the year-earlier month. The index is now at its lowest level on record (my data goes back to 1995). Meanwhile, prices for commercial mortgage backed securities are falling fast, and so are the share prices of REITs and other firms active in the space.