Headlines
 

Headlines are normally self-explanatory; we hope the ones we publish will convey a sense of the terms and conditions present in the real estate capital markets.

“AFIRE (the Association of Foreign Investors in Real Estate) Members Survey Shows 60 Percent Believed the U.S. Commercial real Estate Market Offered the Best Potential for Capital Appreciation Since 2000”

Comment: AFIRE members own in excess of $625 billion of global real estate; 72 percent reported they expect to invest more money in real estate in 2011 than 2010; in 2006, just 23 percent of that year’s survey respondents rated investment in the U.S. as highly as projected in 2011 .

“Commercial real Estate Firms Set to Increase Staffing in 2011”

Comment: Finally!

“Equity REITs Begin 2011 with +4.12 percent Return in January”

Comment: And the average dividend is 3.43 percent.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained basically unchanged with an all-in cost of 5.50%  remaining very attractive.

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

1/14/11

1/21/11

1/28/2011

2/7/2011

Office

342

214

202

204

202

199

Retail

326

207

192

194

191

188

Multifamily

318

188

177

178

174

173

Industrial

333

201

187

188

186

184

 

 

 

 

 

 

Average Asking Spread

330

203

189

191

188

186

 

 

 

 

 

 

10-Year Treasury

3.83%

3.29%

3.40%

3.45%

3.50%

3.64%

Source: Commercial Mortgage Alert; Trepp.

Commentary regarding the Cushman & Wakefield Sonnenblick-Goldman Survey showed little, if any, change over the past two weeks as all-in costs remain “acceptable” to lender and borrower alike.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

1/6/11

1/20/11

2/3/11

Multifamily – Non-Agency

+270

+250

+250

+250

Multifamily – Agency

+280

+260

+260

+255

Regional Mall

+280

+260

+260

-260

Strip/Power Center

+280

+265

+265

+265

Multi-Tenant Industrial

+270

+270

+270

+270

CBD Office

+280

+270

+260

+260

Suburban Office

+300

+300

+270

+270

Full-Service Hotel

+320

+320

+300

+300

Limited-Service Hotel

+400

+375

+350

+330

5-Year Treasury

2.60%

2.07%

2.05%

2.06%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

12/1610

1/6/11

1/20/11

2/3/11

Multifamily – Non-Agency

+190

+190

+190

+190

Multifamily – Agency

+200

+195

+195

+200

Regional Mall

+175

+180

+180

+180

Strip/Power Center

+190

+185

+185

+185

Multi-Tenant Industrial

+190

+190

+190

+190

CBD Office

+180

+180

+180

+180

Suburban Office

+190

+190

+190

+190

Full-Service Hotel

+290

+270

+250

+250

Limited-Service Hotel

+330

+310

+280

+260

10-Year Treasury

3.47%

3.38%

3.45%

3.46%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Floating-Rate Commercial Mortgage

Spreads For 3 – 5 Commercial Real Estate Year Mortgages

12/1610

1/6/11

1/20/11

2/3/11

Multifamily – Non-Agency

+250-300

+225-300

+225-300

+225-300

Multifamily- Agency

+300

+275-300

+250-300

+250-300

Regional Mall

+275-300

+250-275

+250-275

+250-275

Strip/Power Center

+275-300

+275-300

+275-300

+250-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

+250-350

CBD Office

+225-300

+225-300

+250-300

+250-300

Suburban Office

+250-350

+250-300

+275-350

+275-350

Full-Service Hotel

+300-450

+350-450

+350-450

+350-400

Limited-Service Hotel

+450-600

+400-500

+400-500

+400-500

1-Month LIBOR

0.26%

0.26%

0.26%

0.26%

3-Month LIBOR

0.30%

0.30%

0.30%

 

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +6.02%
S & P 500 (2):+5.60%
NASDAQ (3): +5.82%
Russell 2000 (4):+2.36%
MSCI U.S. REIT (5):+4.85%

 (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

2/5/2011

2/12/2011

 

3-Month

0.12%

0.15%

0.11%

 

6-Month

0.18%

0.17%

0.15%

 

2 Year

0.59%

0.74%

0.83%

 

5 Year

2.01%

2.26%

2.36%

 

10 Year

3.29%

3.64%

3.63%

 

Source: Bloomberg LLP.