Headlines
“Equity REITs Decrease in November”
According to the FTSE NAREIT Equity Index, equity REITs showed a negative total return for November, 2011 with the index down 3.7 percent. In October, the index produced a positive rate of return of 14.25 percent.
Year-to-date, REITs are trading up 3.33 percent and are yielding 3.81 percent.
“Five Banks Failed in November” [is the bad news]
The good news is that November’s 5 failures is down from October’s 11 failures. Year-to-date, 90 banks have failed, an annualized pace of 100+/- for the calendar year.
Monday’s Numbers
The Trepp LLC survey showed spreads narrowing a few basis points across all property types in what was a lackluster week in the debt markets.
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 |
12/2/11 |
Office |
342 |
214 |
210 |
Retail |
326 |
207 |
206 |
Multifamily |
318 |
188 |
200 |
Industrial |
333 |
201 |
205 |
Average Asking Spread |
330 |
203 |
205 |
10-Year Treasury |
3.83% |
3.29% |
2.09% |
The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ending December 1, 2011 showed spreads for 10-year mortgages unchanged.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/31/10 |
3/31/11 |
6/30/11 |
9/30/11 |
12/1/11 |
Multifamily - Non-Agency |
+270 |
+245 |
+230 |
+250 |
+265 |
Multifamily – Agency |
+280 |
+250 |
+210 |
+255 |
+255 |
Regional Mall |
+280 |
+260 |
+265 |
+300 |
+310 |
Grocery Anchored |
+280 |
+260 |
+250 |
+290 |
+295 |
Strip and Power Centers |
|
|
+270 |
+310 |
+320 |
Multi-Tenant Industrial |
+270 |
+265 |
+255 |
+295 |
+310 |
CBD Office |
+280 |
+260 |
+255 |
+290 |
+310 |
Suburban Office |
+300 |
+270 |
+270 |
+310 |
+325 |
Full-Service Hotel |
+320 |
+300 |
+275 |
+335 |
+350 |
Limited-Service Hotel |
+400 |
+325 |
+310 |
+345 |
+360 |
5-Year Treasury |
2.60% |
2.23% |
1.52% |
0.99% |
0.98% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/31/10 |
3/31/11 |
6/30/11 |
9/30/11 |
12/1/11 |
Multifamily - Non-Agency |
+190 |
+180 |
+185 |
+240 |
+240 |
Multifamily – Agency |
+200 |
+185 |
+175 |
+235 |
+235 |
Regional Mall |
+175 |
+180 |
+190 |
+250 |
+250 |
Grocery Anchor |
+190 |
+185 |
+200 |
+240 |
+245 |
Strip and Power Centers |
|
|
+195 |
+255 |
+260 |
Multi-Tenant Industrial |
+190 |
+190 |
+190 |
+250 |
+245 |
CBD Office |
+180 |
+180 |
+190 |
+250 |
+250 |
Suburban Office |
+190 |
+190 |
+195 |
+255 |
+265 |
Full-Service Hotel |
+290 |
+230 |
+225 |
+300 |
+300 |
Limited-Service Hotel |
+330 |
+260 |
+245 |
+325 |
+305 |
10-Year Treasury |
3.47% |
3.45% |
2.94% |
2.01% |
2.13% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Floating-Rate Commercial Mortgage
Spreads For 3 - 5 Commercial Real Estate Year Mortgages |
|
12/31/10 |
3/31/11 |
6/30/11 |
9/30/11 |
12/1/11 |
Multifamily – Non-Agency |
+250-300 |
+225-325 |
+200-260 |
+225-250 |
+200-250 |
Multifamily- Agency |
+300 |
+250-310 |
+220-260 |
+230-265 |
+220-265 |
Regional Mall |
+275-300 |
+225-300 |
+205-270 |
+225-275 |
+215-275 |
Grocery Anchored |
+275-300 |
+225-300 |
+205-275 |
+215-275 |
+210-275 |
Strip and Power Centers |
|
|
+225-300 |
+225-300 |
+220-300 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+230-325 |
+250-325 |
+225-325 |
CBD Office |
+225-300 |
+225-300 |
+215-300 |
+240-300 |
+225-300 |
Suburban Office |
+250-350 |
+275-350 |
+250-325 |
+265-325 |
+245-325 |
Full-Service Hotel |
+300-450 |
+350-450 |
+350-450 |
+350-450 |
+350-425 |
Limited-Service Hotel |
+450-600 |
+400-500 |
+400-500 |
+400-500 |
+400-500 |
1-Month LIBOR |
0.26% |
0.22% |
0.19% |
0.24% |
0.27% |
3-Month LIBOR |
0.30% |
0.28% |
0.25% |
0.37% |
0.53% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +5.24%
S & P 500 (2)-0.19%
NASDAQ (3): -023%
Russell 2000 (4):-4.88%
Morgan Stanley U.S. REIT (5):+1.14%
_____
(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 |
12/11/11 |
3-Month |
0.12% |
0.00% |
6-Month |
0.18% |
0.04% |
2 Year |
0.59% |
0.22% |
5 Year |
2.01% |
0.89% |
10 Year |
3.29% |
2.06% |