Headlines
Headlines are normally self-explanatory; we hope the ones we publish will convey a sense of the terms and conditions present in the real estate capital markets.
“American Assets Trust Raises $564 Million in [REIT] IPO”
“AMB Property Corp. and Discuss ProLogis Merger”
Comment: Activity in the REIT sector captured investor interest last week with both a successful IPO and the potential for a “mega-Merger”. The question on everyone’s mind: what’s next?
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged; both sides of the market (borrowers and lenders) seem content for now with spreads and rates where they are.
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 |
1/7/11 |
1/14/11 |
1/21/11 |
Office |
342 |
214 |
200 |
202 |
204 |
Retail |
326 |
207 |
193 |
192 |
194 |
Multifamily |
318 |
188 |
176 |
177 |
178 |
Industrial |
333 |
201 |
188 |
187 |
188 |
|
|
|
|
|
|
Average Asking Spread |
330 |
203 |
189 |
189 |
191 |
|
|
|
|
|
|
10-Year Treasury |
3.83% |
3.29% |
3.38% |
3.40% |
3.45% |
Source: Commercial Mortgage Alert; Trepp. |
Commentary regarding the Cushman & Wakefield Sonnenblick-Goldman Survey will be updated at the next reporting period.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/16/10 |
1/6/11 |
1/20/11 |
Multifamily - Non-Agency |
+270 |
+250 |
+250 |
Multifamily – Agency |
+280 |
+260 |
+260 |
Regional Mall |
+280 |
+260 |
+260 |
Strip/Power Center |
+280 |
+265 |
+265 |
Multi-Tenant Industrial |
+270 |
+270 |
+270 |
CBD Office |
+280 |
+270 |
+260 |
Suburban Office |
+300 |
+300 |
+270 |
Full-Service Hotel |
+320 |
+320 |
+300 |
Limited-Service Hotel |
+400 |
+375 |
+350 |
5-Year Treasury |
2.60% |
2.07% |
2.05% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/1610 |
1/6/11 |
1/20/11 |
Multifamily - Non-Agency |
+190 |
+190 |
+190 |
Multifamily – Agency |
+200 |
+195 |
+195 |
Regional Mall |
+175 |
+180 |
+180 |
Strip/Power Center |
+190 |
+185 |
+185 |
Multi-Tenant Industrial |
+190 |
+190 |
+190 |
CBD Office |
+180 |
+180 |
+180 |
Suburban Office |
+190 |
+190 |
+190 |
Full-Service Hotel |
+290 |
+270 |
+250 |
Limited-Service Hotel |
+330 |
+310 |
+280 |
10-Year Treasury |
3.47% |
3.38% |
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 |
|
12/1610 |
1/6/11 |
1/20/11 |
Multifamily – Non-Agency |
+250-300 |
+225-300 |
+225-300 |
Multifamily- Agency |
+300 |
+275-300 |
+250-300 |
Regional Mall |
+275-300 |
+250-275 |
+250-275 |
Strip/Power Center |
+275-300 |
+275-300 |
+275-300 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+250-350 |
CBD Office |
+225-300 |
+225-300 |
+250-300 |
Suburban Office |
+250-350 |
+250-300 |
+275-350 |
Full-Service Hotel |
+300-450 |
+350-450 |
+350-450 |
Limited-Service Hotel |
+450-600 |
+400-500 |
+400-500 |
1-Month LIBOR |
0.26% |
0.26% |
0.26% |
3-Month LIBOR |
0.30% |
0.30% |
0.30% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +2.14%
S & P 500 (2):+1.21%
NASDAQ (3): +1.40%
Russell 2000 (4): -1.71%
MSCI U.S. REIT (5):+1.20%
(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 |
1/18/11 |
3-Month |
0.12% |
0.14% |
6-Month |
0.18% |
0.15% |
2 Year |
0.59% |
0.25% |
5 Year |
2.01% |
1.99% |
10 Year |
3.29% |
3.32% |
Source: Bloomberg LLP. |