Headlines

“Chinese Property Investor Led Recap of Manhattan Office [Property]”

Mr. Disney was correct—it’s a small world after all, made smaller by the recapitalization of 1180 Avenue of the Americas,  an approximately 384,000 square foot office building located in New York, by HNA Property Holding Group of China which acquired a 90 percent interest in the property for $83 million.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained static, with all-in costs remaining in the 5.00+/- percent range. Our sense is that rates will be “range bound” for the foreseeable future, subject to a “Black Swan” event, like the U.S. Government defaulting on its sovereign debt.

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

5/27/11

Office

342

214

176

Retail

326

207

170

Multifamily

318

188

156

Industrial

333

201

167

Average Asking Spread

330

203

167

10-Year Treasury

3.83%

3.29%

3.07%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended June 2 showed floating rate spreads narrowing maybe 5 basis points with fixed rate spreads basically unchanged. Clearly, financing remains available at attractive and affordable rates.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

3/31/11

4/28/11

5/12/11

6/2/11

Multifamily – Non-Agency

+270

+245

+230

+225

+225

Multifamily – Agency

+280

+250

+205

+200

+200

Regional Mall

+280

+260

+260

+255

+255

Grocery Anchored

+280

+260

+245

+245

+245

Strip and Power Centers

 

 

 

+265

+265

Multi-Tenant Industrial

+270

+265

+245

+245

+245

CBD Office

+280

+260

+250

+250

+250

Suburban Office

+300

+270

+260

+260

+260

Full-Service Hotel

+320

+300

+280

+275

+265

Limited-Service Hotel

+400

+325

+320

+320

+300

5-Year Treasury

2.60%

2.23%

2.05%

1.88%

1.62%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

12/1610

3/31/11

4/12/11

5/12/11

6/2/11

Multifamily – Non-Agency

+190

+180

+180

+180

+180

Multifamily – Agency

+200

+185

+185

+175

+170

Regional Mall

+175

+180

+180

+180

+180

Grocery Anchor

+190

+185

+181

+175

+175

Strip and Power Centers

 

 

 

+190

+190

Multi-Tenant Industrial

+190

+190

+190

+185

+185

CBD Office

+180

+180

+180

+180

+180

Suburban Office

+190

+190

+190

+190

+190

Full-Service Hotel

+290

+230

+230

+220

+220

Limited-Service Hotel

+330

+260

+240

+240

+240

10-Year Treasury

3.47%

3.45%

3.51%

3.22%

2.99%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Floating-Rate Commercial Mortgage

Spreads For 3 – 5 Commercial Real Estate Year Mortgages

12/16/10

4/12/11

4/28/11

5/12/11

6/2/11

Multifamily – Non-Agency

+250-300

+225-325

+225-315

+205-300

+200-275

Multifamily- Agency

+300

+250-310

+250-310

+225-310

+220-270

Regional Mall

+275-300

+225-300

+225-300

+200-275

+205-275

Grocery Anchored

+275-300

+225-300

+225-300

+210-285

+215-285

Strip and Power Centers

 

 

 

+230-300

+235-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

+235-325

+230-325

CBD Office

+225-300

+225-300

+225-300

+225-300

+215-300

Suburban Office

+250-350

+275-350

+250-350

+250-350

+250-325

Full-Service Hotel

+300-450

+350-450

+350-450

+350-450

+350-450

Limited-Service Hotel

+450-600

+400-500

+400-500

+400-500

+400-500

1-Month LIBOR

0.26%

0.22%

0.21%

0.20%

0.19%

3-Month LIBOR

0.30%

0.28%

0.27%

0.26%

0.25%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +4.96%
S & P 500 (2):+3.38%
NASDAQ (3): +3.01%
Russell 2000 (4):+3.12%
MSCI U.S. REIT (5):+8.95%

 (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

5/27/2011

3-Month

0.12%

0.04%

6-Month

0.18%

0.10%

2 Year

0.59%

0.48%

5 Year

2.01%

1.72%

10 Year

3.29%

3.07%