Headlines

The following headline conveys a sense of the terms and conditions present in the real estate capital markets: ING Group Sells ING Real Estate Investment Management.

Comment: The unspoken question: who, if anyone, is next? Is this the start to a wave of merger and acquisitions and/or consolidations among institutional real estate investment managers? Maybe it’s cheaper to buy than to build.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders came in a “few” basis points (0.09%); financing appears available at attractive rates.

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

1/28/2011

2/7/2011

2/14/2011

Office

342

214

202

202

199

189

Retail

326

207

192

191

188

181

Multifamily

318

188

177

174

173

162

Industrial

333

201

187

186

184

178

 

 

 

 

 

 

Average Asking Spread

330

203

189

188

186

178

 

 

 

 

 

 

10-Year Treasury

3.83%

3.29%

3.40%

3.50%

3.64%

3.63%

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

2/15/11

Multifamily – Non-Agency

+270

+250

+250

+250

+250

Multifamily – Agency

+280

+260

+260

+255

+255

Regional Mall

+280

+260

+260

+260

+260

Grocery Anchored

+280

+265

+265

+265

+260

Multi-Tenant Industrial

+270

+270

+270

+270

+270

CBD Office

+280

+270

+260

+260

+260

Suburban Office

+300

+300

+270

+270

+270

Full-Service Hotel

+320

+320

+300

+300

+300

Limited-Service Hotel

+400

+375

+350

+330

+330

5-Year Treasury

2.60%

2.07%

2.05%

2.06%

2.36%

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

2/15/11

Multifamily – Non-Agency

+190

+190

+190

+190

+180

Multifamily – Agency

+200

+195

+195

+200

+190

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

+270

+250

+250

+240

Limited-Service Hotel

+330

+310

+280

+260

+260

10-Year Treasury

3.47%

3.38%

3.45%

3.46%

3.63%

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

2/15/11

Multifamily – Non-Agency

+250-300

+225-300

+225-300

+225-300

+225-300

Multifamily- Agency

+300

+275-300

+250-300

+250-300

+250-300

Regional Mall

+275-300

+250-275

+250-275

+250-275

+250-275

Grocery Anchored

+275-300

+275-300

+275-300

+250-300

+250-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

+250-350

+250-300

CBD Office

+225-300

+225-300

+250-300

+250-300

+250-300

Suburban Office

+250-350

+250-300

+275-350

+275-350

+275-350

Full-Service Hotel

+300-450

+350-450

+350-450

+350-400

+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%

0.26%

3-Month LIBOR

0.30%

0.30%

0.30%

0.31%

0.31%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +7.04%
S & P 500 (2):+6.70%
NASDAQ (3): +6.74%
Russell 2000 (4):+5.65%
MSCI U.S. REIT (5):+5.20%
_____
 (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

2/18/2011

3-Month

0.12%

0.15%

0.11%

0.09%

6-Month

0.18%

0.17%

0.15%

0.14%

2 Year

0.59%

0.74%

0.83%

0.75%

5 Year

2.01%

2.26%

2.36%

2.27%

10 Year

3.29%

3.64%

3.63%

3.58%

Source: Bloomberg LLP.