The commercial mortgage-backed securities market was steady and predictable in the third quarter, but continues down a recovery path that remains choppy at best, a new research note from Bank of America Merrill Lynch said Monday. Alan Todd, a U.S. CMBS strategist with BofAML, said commercial real estate fundamentals are tied to the overall performance of the broader economy, which itself is rocky due to unemployment, uncertainties at major banks and the European debt crisis. Commercial loans tied to properties located in top metropolitan statistical areas are faring better than loans tied to secondary or tertiary markets, Todd concluded in his report. “We expect vacancy rates will remain fairly stable at current levels, but see little room for improvement in the retail and office sectors given the elevated unemployment rate, slowing GDP growth, and weak consumer sentiment,” Todd wrote. Commercial loans remain the chief culprit in U.S. bank failures, Trepp LLC said Monday. Commercial real estate exposure was blamed in October for the nation’s 11 bank failures, Trepp reported. Trepp says in October, commercial real estate loans made up $401 million, or 65.1%, of the total nonperforming loans at failed banks. Write to Kerri Panchuk.