Dubai news also casts doubt over strength of the fledgling US economic recovery.
Dubai's debt woes could further unhinge an already fragile US commercial real estate, as it illustrates the importance of that tiny country to global investors in an increasingly interconnected world.
A state-owned investment conglomerate Dubai World, with $59bn of liabilities, set off a global stock market selloff this week after it said it wants to restructure its debt, including at its property subsidiary Nakheel.
"This downturn has had more of a global impact," said Tony Ciochetti, chairman of Massachusetts Institute of Technology's Center for Real Estate in Cambridge, Massachusetts.
"As I try to explain to my students, with a global economy, we're all attached at the hip financially in some way, shape or form," he added.
The Dubai news also cast doubt over the strength of the fledgling US economic recovery, and the prospects for a bottoming of property prices.
"Dubai may have to unload some very prestigious properties at distressed prices and this will drive the price of all commercial real estate lower," wrote Richard Bove, a banking analyst at Rochdale Securities in Lutz, Florida.
In the United States, Dubai World's portfolio includes several well-known properties, and the fallout could have a larger impact on the entire real estate market.
The company is a partner with casino operator MGM Mirage in the $8.5bn CityCenter project, which would add 6,000 rooms to a Las Vegas Strip gambling corridor already saturated with unoccupied hotel rooms.
Nakheel, perhaps best known as the developer of Dubai's palm-shaped islands, also carries the Mandarin Oriental and W hotels in New York in its portfolio, and has a 50 percent stake in the Fontainebleau Miami Beach resort.
And, through its Istithmar affiliate, Dubai World controls the upscale retailer Barneys New York Inc. (Reuters)