Headlines
Headlines and quotes we publish are intended to convey a sense of the terms and conditions present in the real estate capital markets.
Quote of the Week: “Each of the deals that have gone out have been over-subscribed. There is a lot of originator money chasing borrowers and investor money chasing product,” said Daniel Rubock, Senior Vice President, Moody’s Investors Service, while speaking about competition in the commercial mortgage-backed securities market, as quoted in Real Estate Finance & Investment.
Comment: This is how bubbles are formed.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged with financing available at attractive rates (5.25%+/-).
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) |
|
12/31/09 |
12/31/10 |
3/5/2011 |
3/11/2011 |
3/18/2011 |
3/25/2011 |
Office |
342 |
214 |
183 |
182 |
188 |
190 |
Retail |
326 |
207 |
175 |
171 |
174 |
174 |
Multifamily |
318 |
188 |
159 |
156 |
158 |
159 |
Industrial |
333 |
201 |
171 |
168 |
174 |
172 |
Average Asking Spread |
330 |
203 |
172 |
169 |
174 |
174 |
10-Year Treasury |
3.83% |
3.29% |
3.49% |
3.40% |
3.27% |
3.44% |
Source: Commercial Mortgage Alert; Trepp. |
The Cushman & Wakefield Sonnenblick-Goldman Survey ended March literally where it started with spreads in the 250 basis point (for 5-year loans) and 185 basis point (for 10-year loans).
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/16/10 |
2/3/11 |
2/15/11 |
3/2/11 |
3/31/11 |
Multifamily - Non-Agency |
+270 |
+250 |
+250 |
+245 |
+245 |
Multifamily – Agency |
+280 |
+255 |
+255 |
+250 |
+250 |
Regional Mall |
+280 |
+260 |
+260 |
+260 |
+260 |
Grocery Anchored |
+280 |
+265 |
+260 |
+260 |
+260 |
Multi-Tenant Industrial |
+270 |
+270 |
+270 |
+265 |
+265 |
CBD Office |
+280 |
+260 |
+260 |
+260 |
+260 |
Suburban Office |
+300 |
+270 |
+270 |
+270 |
+270 |
Full-Service Hotel |
+320 |
+300 |
+300 |
+300 |
+300 |
Limited-Service Hotel |
+400 |
+330 |
+330 |
+325 |
+325 |
5-Year Treasury |
2.60% |
2.06% |
2.36% |
2.17% |
2.23% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/1610 |
2/3/11 |
2/15/11 |
3/2/11 |
3/31/11 |
Multifamily - Non-Agency |
+190 |
+190 |
+180 |
+180 |
+180 |
Multifamily – Agency |
+200 |
+200 |
+190 |
+185 |
+185 |
Regional Mall |
+175 |
+180 |
+180 |
+180 |
+180 |
Grocery Anchor |
+190 |
+185 |
+185 |
+185 |
+185 |
Multi-Tenant Industrial |
+190 |
+190 |
+190 |
+190 |
+190 |
CBD Office |
+180 |
+180 |
+180 |
+180 |
+180 |
Suburban Office |
+190 |
+190 |
+190 |
+190 |
+190 |
Full-Service Hotel |
+290 |
+250 |
+240 |
+230 |
+230 |
Limited-Service Hotel |
+330 |
+260 |
+260 |
+260 |
+260 |
10-Year Treasury |
3.47% |
3.46% |
3.63% |
3.47% |
3.45% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages |
|
12/16/10 |
2/3/11 |
2/15/11 |
3/2/11 |
3/31/11 |
Multifamily – Non-Agency |
+250-300 |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
Multifamily- Agency |
+300 |
+250-300 |
+250-300 |
+250-300 |
+250-300 |
Regional Mall |
+275-300 |
+250-275 |
+250-275 |
+225-275 |
+225-300 |
Grocery Anchored |
+275-300 |
+250-300 |
+250-300 |
+225-275 |
+225-300 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+250-300 |
+250-350 |
+250-350 |
CBD Office |
+225-300 |
+250-300 |
+250-300 |
+225-300 |
+225-300 |
Suburban Office |
+250-350 |
+275-350 |
+275-350 |
+275-350 |
+275-350 |
Full-Service Hotel |
+300-450 |
+350-400 |
+350-450 |
+350-450 |
+350-450 |
Limited-Service Hotel |
+450-600 |
+400-500 |
+400-500 |
+400-500 |
+400-500 |
1-Month LIBOR |
0.26% |
0.26% |
0.26% |
0.26% |
0.24% |
3-Month LIBOR |
0.30% |
0.31% |
0.31% |
0.31% |
0.30% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +6.91%
S & P 500 (2):+5.85%
NASDAQ (3): +5.07%
Russell 2000 (4):+7.23%
MSCI U.S. REIT (5):+5.16%
_____
(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 |
|
12/31/10 |
3/19/2011 |
3/23/2011 |
4/2/2011 |
3-Month |
0.12% |
0.06% |
0.08% |
0.06% |
6-Month |
0.18% |
0.13% |
0.16% |
0.14% |
2 Year |
0.59% |
0.58% |
0.73% |
0.80% |
5 Year |
2.01% |
1.94% |
2.16% |
2.24% |
10 Year |
3.29% |
3.27% |
3.44% |
3.44% |
Source: Bloomberg LLP. |