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.
“J.P. Morgan Chase Prices Commercial Mortgage-Backed Securities Transaction”
J.P. Morgan Chase priced an approximately $1.5 billion commercial mortgage-backed securities offering on March 1st. The offering was comprised of the following property types: 63% retail; 25% office; hotel 6%; manufactured housing 3%; self-storage 2%; industrial 1%; and multifamily (less than 1%).
Take-a-way: the CMBS market continues to gain traction.
“CMBS Delinquencies Reach 8.8%”
We will detail delinquencies by property type later in the week. We expect delinquencies to reach 10% before starting to decline later in the year.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders narrowed slightly week-over-week 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 |
2/7/2011 |
2/14/2011 |
2/21/2011 |
2/28/2011 |
Office |
342 |
214 |
199 |
189 |
191 |
188 |
Retail |
326 |
207 |
188 |
181 |
179 |
177 |
Multifamily |
318 |
188 |
173 |
162 |
163 |
159 |
Industrial |
333 |
201 |
184 |
178 |
175 |
173 |
Average Asking Spread |
330 |
203 |
186 |
178 |
177 |
174 |
10-Year Treasury |
3.83% |
3.29% |
3.64% |
3.63% |
3.58% |
3.48% |
Source: Commercial Mortgage Alert; Trepp. |
The Cushman & Wakefield Sonnenblick-Goldman Survey came in slightly over the past two weeks; we expect rates to remain at these levels baring a “shock” to the system for the foreseeable future.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/16/10 |
1/20/11 |
2/3/11 |
2/15/11 |
3/2/11 |
Multifamily - Non-Agency |
+270 |
+250 |
+250 |
+250 |
+245 |
Multifamily – Agency |
+280 |
+260 |
+255 |
+255 |
+250 |
Regional Mall |
+280 |
+260 |
+260 |
+260 |
+260 |
Grocery Anchored |
+280 |
+265 |
+265 |
+260 |
+260 |
Multi-Tenant Industrial |
+270 |
+270 |
+270 |
+270 |
+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 |
+350 |
+330 |
+330 |
+325 |
5-Year Treasury |
2.60% |
2.05% |
2.06% |
2.36% |
2.17% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/1610 |
1/20/11 |
2/3/11 |
2/15/11 |
3/2/11 |
Multifamily - Non-Agency |
+190 |
+190 |
+190 |
+180 |
+180 |
Multifamily – Agency |
+200 |
+195 |
+200 |
+190 |
+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 |
+250 |
+240 |
+230 |
Limited-Service Hotel |
+330 |
+280 |
+260 |
+260 |
+260 |
10-Year Treasury |
3.47% |
3.45% |
3.46% |
3.63% |
3.47% |
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 |
1/20/11 |
2/3/11 |
2/15/11 |
3/2/11 |
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 |
+250-275 |
+225-275 |
Grocery Anchored |
+275-300 |
+275-300 |
+250-300 |
+250-300 |
+225-275 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+250-350 |
+250-300 |
+250-350 |
CBD Office |
+225-300 |
+250-300 |
+250-300 |
+250-300 |
+225-300 |
Suburban Office |
+250-350 |
+275-350 |
+275-350 |
+275-350 |
+275-350 |
Full-Service Hotel |
+300-450 |
+350-450 |
+350-400 |
+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% |
0.26% |
3-Month LIBOR |
0.30% |
0.30% |
0.31% |
0.31% |
0.31% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +4.79%
S & P 500 (2):+4.96%
NASDAQ (3): +4.89%
Russell 2000 (4):+4.78%
MSCI U.S. REIT (5):+3.43%
(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 |
2/18/2011 |
2/26/2011 |
3/4/2011 |
3-Month |
0.12% |
0.09% |
0.12% |
0.11% |
6-Month |
0.18% |
0.14% |
0.15% |
0.15% |
2 Year |
0.59% |
0.75% |
0.71% |
0.68% |
5 Year |
2.01% |
2.27% |
2.16% |
2.18% |
10 Year |
3.29% |
3.58% |
3.48% |
3.49% |
Source: Bloomberg LLP. |