America’s commercial property industry got out the begging bowl yesterday as the credit crisis tightened its grip on the world’s biggest economy.

Amid grave warnings that thousands of office blocks, hotels and shopping centres are braced for bankruptcy, representatives of the industry went cap-in-hand to Washington.

Henry Paulson, the US Treasury Secretary, managed to secure $700 billion of taxpayer funds in October to help to bail out Wall Street banks. The White House agreed last week to lend $17.4 billion (£11.7 billion) to General Motors and Chrysler, the car manufacturers, to prevent them from running out of cash by the end of the year.

It emerged yesterday that representatives of America’s real estate bodies have written to Mr Paulson, who has only a month left in office before he is succeeded by Tim Geithner, requesting federal assistance.

While residential property has been in decline for more than two years, with homes in some states losing half their value, the commercial property market has teetered on the brink of crisis. According to Foresight Analytics, the research firm, about $530 billion of commercial mortgages are due to be refinanced within three years, of which $160 billion will expire within the next 12 months. As the deadline for the refinancing of the debt looms, the American credit markets remain frozen.

In a letter sent to Mr Paulson, signatories representing a dozen property trade groups, wrote: “We believe there is insufficient systemic capacity to refinance expiring, performing commercial real estate loans. For many borrowers, [credit] is not available.”

The seizure of the global credit markets has all but shut down the commercial mortgage-backed securities market, the main source of funding in the commercial property boom. About $20 billion of such securities were issued this year – a dramatic decline from the $230 billion issued in 2007.

Mr Paulson has stuck to his guns and persistently argued that the $700 billion bailout scheme, the Troubled Asset Relief Programme (Tarp), should be used only to address the root problems of the credit crisis, namely distressed banks. However, President Bush dipped into the fund last week to provide an emergency loan to General Motors and Chrysler and it is believed that a figure of $20 billion will be made available from the Tarp to tide over the commercial property market.

In recent weeks, executives from the US commercial property market have been engaged in talks with the Treasury, Harry Reid (the Senate Majority Leader), the Federal Deposit Insurance Corporation and members of Barack Obama’s transition team.

As a result of those talks, it is understood that both the Treasury and the US Federal Reserve have agreed to consider assisting the commercial property market with loans. However, such a measure would not come into effect until February at the earliest.

Mr Obama, who takes office on January 20, is set to be inundated by demands for state aid once he becomes America’s 44th president. Alongside the commercial property market, Mr Obama and Mr Geithner are expected to replace the short-term loans thrown to the car companies and replace them with longer-term ones. At the same time, Mr Obama and his economic team are constructing a new economic fiscal package to offer tax rebates to spur spending.

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