Headlines

Headlines and quotes we publish are intended to convey a sense of the terms and conditions present in the real estate capital markets.

“26 Banks Failed in First Quarter 2011; Lowest Quarterly Total Since the Second Quarter of 2009”

While we certainly anticipate more bank failures during the balance of 2011, the news that the pace of failure appears to be decelerating is encouraging. But solutions to this problem will be measured in years, not quarters.

“Equity REITs Lose 1.28 Percent in March”

Equity REITs showed total returns of (1.28) percent in March versus plus 4.58 percent in February. Best performing sectors were timber (plus 2.23 percent) and manufactured homes (plus 0.60 percent); worst performing sectors were hotels (minus 3.89 percent) and diversified (minus 3.84 percent).

Average equity REIT dividend yield equaled 3.46 percent as of March 31st.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders narrowed over the reporting period with average rates now closer to 5.0%.

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

4/12011

Office

342

214

172

Retail

326

207

170

Multifamily

318

188

152

Industrial

333

201

166

Average Asking Spread

330

203

165

10-Year Treasury

3.83%

3.29%

3.27%

The Cushman & Wakefield Sonnenblick-Goldman survey ended March literally where it started with spreads in the 250 basis point range (for 5-year loans) and 185 basis point range (for 10-year loans).

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

2/3/11

2/15/11

3/2/11

3/31/11

Multifamily – Non-Agency

+270

+250

+250

+245

+245

Multifamily – Agency

+280

+255

+255

+250

+250

Regional Mall

+280

+260

+260

+260

+260

Grocery Anchored

+280

+265

+260

+260

+260

Multi-Tenant Industrial

+270

+270

+270

+265

+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

+330

+330

+325

+325

5-Year Treasury

2.60%

2.06%

2.36%

2.17%

2.23%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

12/16/10

2/3/11

2/15/11

3/2/11

3/31/11

Multifamily – Non-Agency

+190

+190

+180

+180

+180

Multifamily – Agency

+200

+200

+190

+185

+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

+240

+230

+230

Limited-Service Hotel

+330

+260

+260

+260

+260

10-Year Treasury

3.47%

3.46%

3.63%

3.47%

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

12/16/10

2/3/11

2/15/11

3/2/11

3/31/11

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

+225-275

+225-300

Grocery Anchored

+275-300

+250-300

+250-300

+225-275

+225-300

Multi-Tenant Industrial

+250-350

+250-350

+250-300

+250-350

+250-350

CBD Office

+225-300

+250-300

+250-300

+225-300

+225-300

Suburban Office

+250-350

+275-350

+275-350

+275-350

+275-350

Full-Service Hotel

+300-450

+350-400

+350-450

+350-450

+350-450

Limited-Service Hotel

+450-600

+400-500

+400-500

+400-500

+400-500

1-Month LIBOR

0.26%

0.26%

0.26%

0.26%

0.24%

3-Month LIBOR

0.30%

0.31%

0.31%

0.31%

0.30%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +6.94%
S & P 500 (2):+5.52%
NASDAQ (3): +4.73%
Russell 2000 (4):+6.57%
MSCI U.S. REIT (5):+3.22%
_____
 (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

4/9/2011

3-Month

0.12%

0.04%

6-Month

0.18%

0.11%

2 Year

0.59%

0.81%

5 Year

2.01%

2.21%

10 Year

3.29%

3.58%