The Trepp LLC survey showed spreads narrowing 3+/- basis points during a quiet week leading up to a three-day weekend. Average spreads of 215 basis points combined with “sub-2” percent 10-year U.S. Treasury bonds remains attractive to say the least.
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 |
12/31/11 |
6/18/12 |
Month Earlier |
Office |
342 |
214 |
210 |
223 |
205 |
Retail |
326 |
207 |
207 |
216 |
198 |
Multifamily |
318 |
188 |
198 |
209 |
186 |
Industrial |
333 |
201 |
205 |
213 |
190 |
Average Spread |
330 |
203 |
205 |
215 |
195 |
10-Year Treasury |
3.83% |
3.29% |
1.88% |
1.72% |
1.98% |
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 5 Year Commercial Real Estate Mortgages |
|
12/31/10 |
1/26/12 |
2/28/12 |
3/28/12 |
4/27/12 |
Multifamily - Non-Agency |
+270 |
+240 |
+240 |
+230 |
+240 |
Multifamily – Agency |
+280 |
+245 |
+210 |
+195 |
+200 |
Regional Mall |
+280 |
+300 |
+300 |
+275 |
+275 |
Grocery Anchored |
+280 |
+295 |
+290 |
+270 |
+270 |
Strip and Power Centers |
|
+320 |
+315 |
+295 |
+295 |
Multi-Tenant Industrial |
+270 |
+305 |
+310 |
+310 |
+285 |
CBD Office |
+280 |
+310 |
+310 |
+295 |
+270 |
Suburban Office |
+300 |
+320 |
+320 |
+310 |
+290 |
Full-Service Hotel |
+320 |
+350 |
+350 |
+350 |
+340 |
Limited-Service Hotel |
+400 |
+360 |
+360 |
+360 |
+350 |
5-Year Treasury |
2.60% |
0.89% |
0.78% |
0.83% |
0.83% |
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 |
1/26/12 |
2/28/12 |
3/28/12 |
4/27/12 |
Multifamily - Non-Agency |
+190 |
+210 |
+210 |
+200 |
+210 |
Multifamily – Agency |
+200 |
+205 |
+180 |
+165 |
+170 |
Regional Mall |
+175 |
+245 |
+235 |
+275 |
+220 |
Grocery Anchor |
+190 |
+240 |
+230 |
+270 |
+200 |
Strip and Power Centers |
|
+255 |
+250 |
+290 |
+235 |
Multi-Tenant Industrial |
+190 |
+255 |
+250 |
+280 |
+240 |
CBD Office |
+180 |
+240 |
+320 |
+270 |
+220 |
Suburban Office |
+190 |
+260 |
+250 |
+290 |
+245 |
Full-Service Hotel |
+290 |
+290 |
+290 |
+325 |
+260 |
Limited-Service Hotel |
+330 |
+315 |
+315 |
+345 |
+290 |
10-Year Treasury |
3.47% |
1.97% |
1.90% |
2.21% |
1.95% |
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 |
1/26/12 |
2/28/12 |
3/28/12 |
4/27/12 |
Multifamily – Non-Agency |
+250-300 |
+200-250 |
+200-250 |
+200-250 |
+200-250 |
Multifamily- Agency |
+300 |
+220-265 |
+220-265 |
+220-265 |
+220-265 |
Regional Mall |
+275-300 |
+210-265 |
+200-265 |
+200-265 |
+200-265 |
Grocery Anchored |
+275-300 |
+200-275 |
+200-275 |
+200-275 |
+200-275 |
Strip and Power Centers |
|
+225-300 |
+225-300 |
+225-300 |
+225-300 |
Multi-Tenant Industrial |
+250-350 |
+225-305 |
+225-305 |
+225-305 |
+225-305 |
CBD Office |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
Suburban Office |
+250-350 |
+250-325 |
+250-325 |
+250-325 |
+250-325 |
Full-Service Hotel |
+300-450 |
+350-425 |
+275-400 |
+275-400 |
+250-400 |
Limited-Service Hotel |
+450-600 |
+400-500 |
+350-550 |
+325-450 |
+325-450 |
1-Month LIBOR |
0.26% |
0.27% |
0.24% |
0.24% |
0.24% |
3-Month LIBOR |
0.30% |
0.55% |
0.49% |
0.47% |
0.47% |
* A dash (-) indicates a range. |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +1.94%
S & P 500 (2): +4.79%
NASDAQ (3): +8.92%
Russell 2000 (4):+3.44%
Morgan Stanley U.S. REIT (5):+7.57%
_____
(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 |
12/31/11 |
5/26/2012 |
3-Month |
0.12% |
0.01% |
0.08% |
6-Month |
0.18% |
0.06% |
0.13% |
2 Year |
0.59% |
0.24% |
0.29% |
5 Year |
2.01% |
0.83% |
0.76% |
7 Year |
|
|
1.17% |
10 Year |
3.29% |
1.88% |
1.72% |
Key Rates (in Percentages) |
|
Current |
1 Mo. Prior |
3 Mo. Prior |
6 Mo. Prior |
1 Yr. Prior |
Fed Funds Rate |
0.17 |
0.15 |
0.11 |
0.07 |
.010 |
Federal Reserve Target Rate |
0.25 |
0.25 |
0.25 |
0.25 |
0.25 |
Prime Rate |
3.25 |
3.25 |
3.25 |
3.25 |
3.25 |
US Unemployment Rate |
8.10 |
8.20 |
8.30 |
8.90 |
9.00 |
1-Month Libor |
0.24 |
0.24 |
0.24 |
0.26 |
0.19 |
3-Month Libor |
0.47 |
0.47 |
0.49 |
0.52 |
0.25 |