Headlines
"None Worth Mentioning"
For real estate, it was just another week; properties were bought and sold, financed and refinanced. Against this background, the news of the week was the Euro-crises and its extension from solely country (Sovereign) risk to questions about the solvency of Euro-banks and other financial institutions.
Against this backdrop, one wonders why the indices were only down between 5.0 percent and 9.0 percent; it could have been a rout!
In case you're interested (or just a glutton for punishment), the damage was widespread:
Dow Jones Industrial Average: -6.41 percent
NASDAQ Composite: -5.30 percent
S & P 500 Index: -6.54 percent
NYSE Index: -7.86 percent
AMEX Index: -7.79 percent
Russell 2000: -8.65 percent
Morgan Stanley REIT Index: -8.88 percent
Monday's Numbers
The Trepp LLC survey showed spreads continuing at current levels as everyone appears focused on an array of non-real estate factors and events such as the Federal Reserve doing the "Twist", Euro-financial market confusion, and Sovereign risk, to name a few. Deals are continuing to get done at slightly wider spreads.
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 |
9/16/11 |
Office |
342 |
214 |
220 |
Retail |
326 |
207 |
211 |
Multifamily |
318 |
188 |
208 |
Industrial |
333 |
201 |
212 |
Average Asking Spread |
330 |
203 |
207 |
10-Year Treasury |
3.83% |
3.29% |
2.05% |
We expect the Cushman & Wakefield Sonnenblick-Goldman Survey will be updated during the upcoming week. Based on anecdotal information, the survey's spreads appear to be "market good".
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/16/10 |
3/31/11 |
7/28/11 |
8/11/11 |
8/24/11 |
Multifamily - Non-Agency |
+270 |
+245 |
+250 |
+255 |
+265 |
Multifamily – Agency |
+280 |
+250 |
+240 |
+265 |
+250 |
Regional Mall |
+280 |
+260 |
+280 |
+290 |
+290 |
Grocery Anchored |
+280 |
+260 |
+270 |
+285 |
+285 |
Strip and Power Centers |
|
|
+290 |
+300 |
+300 |
Multi-Tenant Industrial |
+270 |
+265 |
+275 |
+295 |
+285 |
CBD Office |
+280 |
+260 |
+275 |
+290 |
+290 |
Suburban Office |
+300 |
+270 |
+295 |
+300 |
+300 |
Full-Service Hotel |
+320 |
+300 |
+230 |
+320 |
+320 |
Limited-Service Hotel |
+400 |
+325 |
+320 |
+340 |
+340 |
5-Year Treasury |
2.60% |
2.23% |
1.49% |
0.97% |
0.96% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 10 Year Commercial Real Estate Mortgages |
|
12/1610 |
3/31/11 |
7/28/11 |
8/11/11 |
8/24/11 |
Multifamily - Non-Agency |
+190 |
+180 |
+195 |
+240 |
+240 |
Multifamily – Agency |
+200 |
+185 |
+190 |
+245 |
+230 |
Regional Mall |
+175 |
+180 |
+205 |
+240 |
+255 |
Grocery Anchor |
+190 |
+185 |
+195 |
+230 |
+250 |
Strip and Power Centers |
|
|
+210 |
+250 |
+260 |
Multi-Tenant Industrial |
+190 |
+190 |
+230 |
+240 |
+250 |
CBD Office |
+180 |
+180 |
+225 |
+240 |
+255 |
Suburban Office |
+190 |
+190 |
+235 |
+260 |
+260 |
Full-Service Hotel |
+290 |
+230 |
+250 |
+275 |
+275 |
Limited-Service Hotel |
+330 |
+260 |
+270 |
+295 |
+280 |
10-Year Treasury |
3.47% |
3.45% |
2.97% |
2.23% |
2.16% |
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 |
8/11/11 |
7/28/11 |
824/11 |
Multifamily – Non-Agency |
+250-300 |
+225-325 |
+220-260 |
+200-250 |
+220-260 |
Multifamily- Agency |
+300 |
+250-310 |
+230-270 |
+220-260 |
+230-270 |
Regional Mall |
+275-300 |
+225-300 |
+220-270 |
+205-270 |
+220-270 |
Grocery Anchored |
+275-300 |
+225-300 |
+210-275 |
+205-275 |
+210-275 |
Strip and Power Centers |
|
|
+235-300 |
+225-300 |
+235-300 |
Multi-Tenant Industrial |
+250-350 |
+250-350 |
+250-325 |
+230-325 |
+250-325 |
CBD Office |
+225-300 |
+225-300 |
+235-300 |
+225-300 |
+235-300 |
Suburban Office |
+250-350 |
+275-350 |
+265-325 |
+250-325 |
+265-325 |
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% |
0.22% |
0.21% |
0.19% |
0.22% |
3-Month LIBOR |
0.30% |
0.28% |
0.29% |
0.25% |
0.31% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): -6.96%
S & P 500 (2):-9.64%
NASDAQ (3): -6.39%
Russell 2000 (4):-16.74%
MSCI U.S. REIT (5):-6.65%
_____
(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 |
9/23/2011 |
3-Month |
0.12% |
-0.01% |
6-Month |
0.18% |
0.01% |
2 Year |
0.59% |
0.21% |
5 Year |
2.01% |
0.86% |
10 Year |
3.29% |
1.83% |