The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders narrowed slightly in response to widening in the yield of 10-year Treasury bonds. There seems to be an all-in cost of 5.0% “glass ceiling” in place as loan spreads moved in and Treasury spreads widened to accommodate changes in spreads and/or yields. For the survey period, average all-in cost equaled 4.87 percent.
Asking Spreads over U.S. Treasury Bonds in Basis Points (10-year Commercial and Multifamily Mortgage Loans with 50% to 59% Loan-to-Value ratios) |
|
12/31 |
10/15 |
10/22 |
10/29 |
11/5 |
11/12 |
Office |
342 |
248 |
244 |
253 |
228 |
221 |
Retail |
326 |
233 |
230 |
234 |
213 |
209 |
Multifamily |
318 |
207 |
212 |
205 |
198 |
195 |
Industrial |
333 |
231 |
229 |
226 |
211 |
206 |
|
|
|
|
|
|
|
Average Asking Spread |
330 |
231 |
229 |
230 |
213 |
208 |
|
|
|
|
|
|
|
10-Year Treasury |
3.83% |
2.55% |
2.60% |
2.53% |
2.53% |
2.79% |
Source: Commercial Mortgage Alert; Trepp. |
Changes in spreads in the November 11th Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) mixed and property sector specific with all-in costs supporting our 10-year term, 5.0 percent, glass ceiling thesis.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages |
|
1/6/10 |
9/16/10 |
10/13/10 |
10/27/10 |
11/11/10 |
Multifamily - Non-Agency |
+360 |
+280 |
+280 |
+280 |
+280 |
Multifamily – Agency |
+220 |
+240 |
+240 |
+250 |
+280 |
Regional Mall |
+450 |
+290 |
+280 |
+290 |
+305 |
Strip/Power Center |
+460 |
+300 |
+285 |
+295 |
+280 |
Multi-Tenant Industrial |
+435 |
+280 |
+275 |
+275 |
+280 |
CBD Office |
+435 |
+270 |
+270 |
+270 |
+280 |
Suburban Office |
+465 |
+300 |
+300 |
+300 |
+300 |
Full-Service Hotel |
+500 |
+400 |
+375 |
+375 |
+350 |
Limited-Service Hotel |
+500 |
+450 |
+450 |
+450 |
+425 |
5-Year Treasury |
2.60% |
1.51% |
1.17% |
1.14% |
1.11% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages |
|
1/6/10 |
9/16/10 |
10/13/10 |
10/27/10 |
11/11/10 |
Multifamily - Non-Agency |
+300 |
+180 |
+180 |
+180 |
+180 |
Multifamily – Agency |
+220 |
+190 |
+190 |
+190 |
+190 |
Regional Mall |
+350 |
+200 |
+200 |
+200 |
+215 |
Strip/Power Center |
+350 |
+200 |
+200 |
+205 |
+220 |
Multi-Tenant Industrial |
+420 |
+200 |
+190 |
+190 |
+190 |
CBD Office |
+330 |
+190 |
+190 |
+190 |
+190 |
Suburban Office |
+355 |
+220 |
+220 |
+220 |
+200 |
Full-Service Hotel |
+550 |
+350 |
+340 |
+340 |
+335 |
Limited-Service Hotel |
+575 |
+380 |
+380 |
+380 |
+350 |
10-Year Treasury |
3.85% |
2.76% |
2.45% |
2.71% |
2.72% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages |
|
1/6/10 |
9/16/10 |
10/13/10 |
10/27/10 |
11/11/10 |
Multifamily – Non-Agency |
+300 – 400 |
+275-325 |
+250-300 |
+275-325 |
+250-300 |
Multifamily- Agency |
NA |
NA |
NA |
NA |
300 |
Regional Mall |
+475 – 600 |
+275-350 |
+275-350 |
+275-350 |
+275-350 |
Strip/Power Center |
+450 – 650 |
+275-350 |
+275-350 |
+275-350 |
+275-350 |
Multi-Tenant Industrial |
+400 – 500 |
+250-350 |
+250-350 |
+250-350 |
+250-350 |
CBD Office |
+425 |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
Suburban Office |
+425 |
+250-350 |
+250-350 |
+250-350 |
+250-350 |
Full-Service Hotel |
+600 |
+375-500 |
+375-500 |
+375-500 |
+375-500 |
Limited-Service Hotel |
+750 |
+450-550 |
+450-600 |
+450-600 |
+450-600 |
1-Month LIBOR |
0.23% |
0.26% |
0.26% |
0.26% |
0.25% |
3-Month LIBOR |
0.25% |
0.31% |
0.29% |
0.29% |
0.29% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +7.44%
S & P 500 (2):+7.59%
NASDAQ (3): +10.97%
Russell 2000 (4): +15.83%
MSCI U.S. REIT (5):+21.56%
(1) Dow Jones Industrial Average. (2) Standard & Poor’s 500 Stock Index. (3) NASD Composite Index.
(4) Small Capitalization segment of U.S. equity universe. (5) Morgan Stanley REIT Index.
U.S. Treasury Yields |
|
1/6/10 |
4/9/10 |
9/30/10 |
11/21/10 |
3-Month |
.016% |
0.15% |
0.15% |
0.15% |
6-Month |
0.25% |
0.23% |
0.19% |
0.18% |
2 Year |
0.99% |
1.06% |
0.41% |
0.50% |
5 Year |
2.60% |
2.62% |
1.26% |
1.52% |
10 Year |
3.85% |
3.88% |
2.51% |
2.87% |
Source: Bloomberg LLP. |