Headlines

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

Quote of the Week: “Each of the deals that have gone out have been over-subscribed. There is a lot of originator money chasing borrowers and investor money chasing product,” said Daniel Rubock, Senior Vice President, Moody’s Investors Service, while speaking about competition in the commercial mortgage-backed securities market, as quoted in Real Estate Finance & Investment.

Comment:  This is how bubbles are formed.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged 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

3/5/2011

3/11/2011

3/18/2011

3/25/2011

Office

342

214

183

182

188

190

Retail

326

207

175

171

174

174

Multifamily

318

188

159

156

158

159

Industrial

333

201

171

168

174

172

Average Asking Spread

330

203

172

169

174

174

10-Year Treasury

3.83%

3.29%

3.49%

3.40%

3.27%

3.44%

Source: Commercial Mortgage Alert; Trepp.

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

12/1610

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): +6.91%
S & P 500 (2):+5.85%
NASDAQ (3): +5.07%
Russell 2000 (4):+7.23%
MSCI U.S. REIT (5):+5.16%
_____
 (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

3/19/2011

3/23/2011

4/2/2011

3-Month

0.12%

0.06%

0.08%

0.06%

6-Month

0.18%

0.13%

0.16%

0.14%

2 Year

0.59%

0.58%

0.73%

0.80%

5 Year

2.01%

1.94%

2.16%

2.24%

10 Year

3.29%

3.27%

3.44%

3.44%

Source: Bloomberg LLP.