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.

“Banyan Tree Closes $214 Million Hospitality Fund;” “UBS Raises Additional Capital for Core-Oriented Fund;” and “AXA Real Estate Holds First Closes for European Debt Fund” — all good indicators of the capital markets today.

Comment: Healthy sign—velocity of institutional fundraising increasing.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged. Wait another two weeks and we’ll see how things shape up after the first round of 2011 deals are committed.

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

1/7/11

1/14/11

Office

342

214

200

202

Retail

326

207

193

192

Multifamily

318

188

176

177

Industrial

333

201

188

187

Average Asking Spread

330

203

189

189

10-Year Treasury

3.83%

3.29%

3.38%

3.40%

Source: Commercial Mortgage Alert; Trepp.

The Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) was unchanged for the reporting period.

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

Multifamily – Non-Agency

+270

+250

+250

Multifamily – Agency

+280

+260

+260

Regional Mall

+280

+260

+260

Strip/Power Center

+280

+265

+265

Multi-Tenant Industrial

+270

+270

+270

CBD Office

+280

+270

+260

Suburban Office

+300

+300

+270

Full-Service Hotel

+320

+320

+300

Limited-Service Hotel

+400

+375

+350

5-Year Treasury

2.60%

2.07%

2.05%

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

Multifamily – Non-Agency

+190

+190

+190

Multifamily – Agency

+200

+195

+195

Regional Mall

+175

+180

+180

Strip/Power Center

+190

+185

+185

Multi-Tenant Industrial

+190

+190

+190

CBD Office

+180

+180

+180

Suburban Office

+190

+190

+190

Full-Service Hotel

+290

+270

+250

Limited-Service Hotel

+330

+310

+280

10-Year Treasury

3.47%

3.38%

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

12/1610

1/6/11

1/20/11

Multifamily – Non-Agency

+250-300

+225-300

+225-300

Multifamily- Agency

+300

+275-300

+250-300

Regional Mall

+275-300

+250-275

+250-275

Strip/Power Center

+275-300

+275-300

+275-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

CBD Office

+225-300

+225-300

+250-300

Suburban Office

+250-350

+250-300

+275-350

Full-Service Hotel

+300-450

+350-450

+350-450

Limited-Service Hotel

+450-600

+400-500

+400-500

1-Month LIBOR

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): +2.55%
S & P 500 (2):+1.96%
NASDAQ (3): +1.30%
Russell 2000 (4): -2.04%
MSCI U.S. REIT (5):-0019%

 (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

1/8/11

1/15/11

1/22/11

3-Month

0.12%

0.13%

0.15%

0.15%

6-Month

0.18%

0.17%

0.17%

0.18%

2 Year

0.59%

0.59%

0.57%

0.61%

5 Year

2.01%

1.96%

1.92%

2.00%

10 Year

3.29%

3.32%

3.32%

3.40%

Source: Bloomberg LLP.