The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders came in slightly during the most recent survey period. During the period, 10-year Treasury bond yields were unchanged. There seems to be an all-in cost of 5.0% “glass ceiling” in place. For the survey period, average all-in cost equaled 5.02%, the “present” glass ceiling. Not much is expected to happen during the next two weeks so we’ll sit on the sidelines and wait for January’s allocation to re-fill lender’s coffers.

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

10/29

11/5

11/12

11/26

12/3

Office

342

253

228

221

222

220

Retail

326

234

213

209

208

206

Multifamily

318

205

198

195

195

192

Industrial

333

226

211

206

208

202

Average Asking Spread

330

230

213

208

208

205

10-Year Treasury

3.83%

2.53%

2.53%

2.79%

2.72%

2.72%

Source: Commercial Mortgage Alert; Trepp.

Changes in spreads in the December 3rd Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) were basically nil, continuing to support our 10-year term, 5.0 percent, glass ceiling thesis.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

1/6/10

10/13/10

10/27/10

11/11/10

12/3/10

Multifamily – Non-Agency

+360

+280

+280

+280

+280

Multifamily – Agency

+220

+240

+250

+280

+280

Regional Mall

+450

+280

+290

+305

+290

Strip/Power Center

+460

+285

+295

+280

+300

Multi-Tenant Industrial

+435

+275

+275

+280

+280

CBD Office

+435

+270

+270

+280

+280

Suburban Office

+465

+300

+300

+300

+300

Full-Service Hotel

+500

+375

+375

+350

+350

Limited-Service Hotel

+500

+450

+450

+425

+380

5-Year Treasury

2.60%

1.17%

1.14%

1.11%

1.66%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

1/6/10

10/13/10

10/27/10

11/11/10

12/3/10

Multifamily – Non-Agency

+300

+180

+180

+180

+190

Multifamily – Agency

+220

+190

+190

+190

+200

Regional Mall

+350

+200

+200

+215

+175

Strip/Power Center

+350

+200

+205

+220

+190

Multi-Tenant Industrial

+420

+190

+190

+190

+190

CBD Office

+330

+190

+190

+190

+190

Suburban Office

+355

+220

+220

+200

+190

Full-Service Hotel

+550

+340

+340

+335

+300

Limited-Service Hotel

+575

+380

+380

+350

+350

10-Year Treasury

3.85%

2.45%

2.71%

2.72%

2.98%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Floating-Rate Commercial Mortgage

Spreads For 3 – 5 Commercial Real Estate Year Mortgages

1/6/10

10/13/10

10/27/10

11/11/10

12/3/10

Multifamily – Non-Agency

+300 – 400

+250-300

+275-325

+250-300

+250-300

Multifamily- Agency

NA

NA

NA

+300

+300

Regional Mall

+475 – 600

+275-350

+275-350

+275-350

+275-325

Strip/Power Center

+450 – 650

+275-350

+275-350

+275-350

+275-325

Multi-Tenant Industrial

+400 – 500

+250-350

+250-350

+250-350

+250-350

CBD Office

+425

+225-300

+225-300

+225-300

+225-300

Suburban Office

+425

+250-350

+250-350

+250-350

+250-350

Full-Service Hotel

+600

+375-500

+375-500

+375-500

+300-450

Limited-Service Hotel

+750

+450-600

+450-600

+450-600

+450-600

1-Month LIBOR

0.23%

0.26%

0.26%

0.25%

0.26%

3-Month LIBOR

0.25%

0.29%

0.29%

0.29%

0.30%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +9.42%
S & P 500 (2):+11.24%
NASDAQ (3): +16.23%
Russell 2000 (4): +22.51%
MSCI U.S. REIT (5):+19.98%

 (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

1/6/10

4/9/10

9/30/10

12/12/10

3-Month

.016%

0.15%

0.15%

0.12%

6-Month

0.25%

0.23%

0.19%

0.18%

2 Year

0.99%

1.06%

0.41%

0.62%

5 Year

2.60%

2.62%

1.26%

1.96%

10 Year

3.85%

3.88%

2.51%

3.30%

Source: Bloomberg LLP.