Will subprime spread to commercial real estate?

There were some big winners when the subprime market went into the tank, and many believe we should watch those winners for future indicators. These people are not singing the mortage blues, and in fact made plenty of money by correctly seeing the future. Here is what they see now:

Traders who bet against the U.S. residential mortgage market ahead of the subprime crisis and won are now setting their sights on the commercial real estate sector.

Hedge funds and other traders that have profited from huge drops in an index tied to home mortgage loans made to people with weak credit are now aiming at sister indexes based on loans for office buildings and hotels.