Commercial Property Bonds vs. Corporate Bonds. Which is better?

Many corporate bonds are offering high-yield returns right now, trading less than its face value while still relative stable. Commercial real estate starts to get hit hard while office and mall vacancy rate shooting to the roof and it is not going to get recovered in anytime soon. Which is relative better? Commercial Property Bond or Corporate Bond? Is Commercial Property Bond going to become junk bond and worth almost nothing just like residential?

According to CNBC:

"Commercial real estate—like its much bigger residential cousin—is starting to get hammered by the credit crisis and slumping economy. But for investors, the news isn't all bad.

Regional banks and some real estate investment trusts, or REITs, are likely to get hit hard as delinquencies on commercial real estate loans rise. But oddly, commercial mortgage-backed securities, or CMBS, are offering outsized gains with less risk than you might think.

Commercial-mortgage securities are in far better shape than their residential counterparts, even though they've been sold off as investors dump anything related to real estate. That's because the underwriting standards have typically been tighter for CMBS, especially in recent years when people could get residential mortgages with little or no documentation.

Roughly 80 percent of CMBS bonds are still rated Triple A. They're also structured so that investors are largely insulated from anything but large-scale defaults.

Another reason is that investors get much more information about the health of the commercial mortgages, allowing them to bypass the credit rating agencies."