Headlines
“Fitch Sees CMBS Defaults Stabilizing; Cumulative Rate [of default] to Top 12 Percent”
Talk about mixed messages! I think what Fitch is saying is that the pace of defaults is slowing and we will reach the high-water mark—12 percent plus this year.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders widened 5 to 10 basis points during the week, with all-in costs remaining in the 5.00+/- percent range.
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 |
5/20/11 |
Office |
342 |
214 |
176 |
Retail |
326 |
207 |
169 |
Multifamily |
318 |
188 |
151 |
Industrial |
333 |
201 |
166 |
Average Asking Spread |
330 |
203 |
161 |
10-Year Treasury |
3.83% |
3.29% |
3.15% |
The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended May 12 showed spreads narrowing 10 to 15 basis points and financing remaining available at attractive and affordable rates.
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/16/10 |
3/2/11 |
3/31/11 |
4/28/11 |
5/12/11 |
Multifamily - Non-Agency |
+270 |
+245 |
+245 |
+230 |
+225 |
Multifamily – Agency |
+280 |
+250 |
+250 |
+205 |
+200 |
Regional Mall |
+280 |
+260 |
+260 |
+260 |
+255 |
Grocery Anchored |
+280 |
+260 |
+260 |
+245 |
+245 |
Strip and Power Centers |
|
|
|
|
+265 |
Multi-Tenant Industrial |
+270 |
+265 |
+265 |
+245 |
+245 |
CBD Office |
+280 |
+260 |
+260 |
+250 |
+250 |
Suburban Office |
+300 |
+270 |
+270 |
+260 |
+260 |
Full-Service Hotel |
+320 |
+300 |
+300 |
+280 |
+275 |
Limited-Service Hotel |
+400 |
+325 |
+325 |
+320 |
+320 |
5-Year Treasury |
2.60% |
2.17% |
2.23% |
2.05% |
1.88% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/1610 |
3/2/11 |
3/31/11 |
4/12/11 |
5/12/11 |
Multifamily - Non-Agency |
+190 |
+180 |
+180 |
+180 |
+180 |
Multifamily – Agency |
+200 |
+185 |
+185 |
+185 |
+175 |
Regional Mall |
+175 |
+180 |
+180 |
+180 |
+180 |
Grocery Anchor |
+190 |
+185 |
+185 |
+181 |
+175 |
Strip and Power Centers |
|
|
|
|
+190 |
Multi-Tenant Industrial |
+190 |
+190 |
+190 |
+190 |
+185 |
CBD Office |
+180 |
+180 |
+180 |
+180 |
+180 |
Suburban Office |
+190 |
+190 |
+190 |
+190 |
+190 |
Full-Service Hotel |
+290 |
+230 |
+230 |
+230 |
+220 |
Limited-Service Hotel |
+330 |
+260 |
+260 |
+240 |
+240 |
10-Year Treasury |
3.47% |
3.47% |
3.45% |
3.51% |
3.22% |
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 |
3/31/11 |
4/12/11 |
4/28/11 |
5/12/11 |
Multifamily – Non-Agency |
+250-300 |
+225-300 |
+225-325 |
+225-315 |
+205-300 |
Multifamily- Agency |
+300 |
+250-300 |
+250-310 |
+250-310 |
+225-310 |
Regional Mall |
+275-300 |
+225-300 |
+225-300 |
+225-300 |
+200-275 |
Grocery Anchored |
+275-300 |
+225-300 |
+225-300 |
+225-300 |
+210-285 |
Strip and Power Centers |
|
|
|
|
+230-300 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+250-350 |
+250-350 |
+235-325 |
CBD Office |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
Suburban Office |
+250-350 |
+275-350 |
+275-350 |
+250-350 |
+250-350 |
Full-Service Hotel |
+300-450 |
+350-450 |
+350-450 |
+350-450 |
+350-450 |
Limited-Service Hotel |
+450-600 |
+400-500 |
+400-500 |
+400-500 |
+400-500 |
1-Month LIBOR |
0.26% |
0.24% |
0.22% |
0.21% |
0.20% |
3-Month LIBOR |
0.30% |
0.30% |
0.28% |
0.27% |
0.26% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +7.456%
S & P 500 (2):+5.84%
NASDAQ (3): +5.43%
Russell 2000 (4):+6.68%
MSCI U.S. REIT (5):+10.78%
(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 |
5/27/2011 |
3-Month |
0.12% |
0.04% |
6-Month |
0.18% |
0.10% |
2 Year |
0.59% |
0.48% |
5 Year |
2.01% |
1.72% |
10 Year |
3.29% |
3.07% |