During a conference call yesterday, New York City–based Reis hosted a fourth-quarter capital markets briefing and shared its 2012 commercial real estate outlook.

Ryan Severino, a senior economist at Reis, thinks transaction volume across commercial real estate could be on the brink of resurgence in 2012. But he followed the optimistic statement with words of caution, warning that this year should be a challenging one for the capital markets. Reis issued a modest outlook for commercial mortgage-backed securities (CMBSs) in 2012, following signs of progress seen in issuance levels toward the end of 2011. Yet the slight improvement rolling into January won’t likely be enough to stave off the effects of upcoming term defaults.

“The key concern is debt maturation in 2012. Expect there to be more defaults, and look for us to reap what we had sewn back in 2007,” said Severino, referring to the large number of five-year term loans set to expire this year. He believes there will be opportunity to refinance in 2012 but that it will almost certainly be a bumpy ride, and he warned investors to “buckle up.”

The CMBSs set to mature will have to default, recapitalize, or sell off assets at a large discount. By Severino’s estimation, somewhere between one-fourth and one-third of term loans will actually be able to refinance, so “expect to see more CMBSs default this year than in 2011,” he added. In addition to the loan-default time bomb waiting to go off, the company issued a “tepid outlook” for employment growth in 2012 and suggested that cap-rate compression was taking place because fundamentals were outperforming expectations. Also, Reis expects insurance companies to remain active lenders until the fate of the GSEs is decided.

Overall, Reis viewed 2011 as a disappointment for the mortgage market. The fourth quarter was a slight improvement from the third quarter, the firm noted, but not enough to cast a confident outlook in 2012. Transaction volume eked out a slight increase in Q4, and vacancy rates declined in the apartment, office, and retail sectors. But there was a lack of available capital to fund small businesses, leading to waning interest in suburban markets. The bright spot from the briefing is that an end to the interest in rental housing is not expected in early 2012.