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.

“American Assets Trust Raises $564 Million in [REIT] IPO”

“AMB Property Corp. and Discuss ProLogis Merger”

Comment: Activity in the REIT sector captured investor interest last week with both a successful IPO and the potential for a “mega-Merger”. The question on everyone’s mind: what’s next?

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged; both sides of the market (borrowers and lenders) seem content for now with spreads and rates where they are.

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

1/21/11

Office

342

214

200

202

204

Retail

326

207

193

192

194

Multifamily

318

188

176

177

178

Industrial

333

201

188

187

188

 

 

 

 

 

Average Asking Spread

330

203

189

189

191

 

 

 

 

 

10-Year Treasury

3.83%

3.29%

3.38%

3.40%

3.45%

Source: Commercial Mortgage Alert; Trepp.

Commentary regarding the Cushman & Wakefield Sonnenblick-Goldman Survey will be updated at the next 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): +2.14%
S & P 500 (2):+1.21%
NASDAQ (3): +1.40%
Russell 2000 (4): -1.71%
MSCI U.S. REIT (5):+1.20%

 (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

1/18/11

3-Month

0.12%

0.14%

6-Month

0.18%

0.15%

2 Year

0.59%

0.25%

5 Year

2.01%

1.99%

10 Year

3.29%

3.32%

Source: Bloomberg LLP.