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Bair says major banks should have even higher capital requirements

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., said major financial institutions should be subject to higher capital requirements than proposed. Bair wants the big banks to prove that winding them down would not be a problem if they become insolvent. “I believe we should impose even higher capital charges on systemic entities until they have developed a resolution plan which has been approved as credible by their regulators,” Bair said.

Pretty strong, but hard to take issue with; your opinion?

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained literally “frozen in place” over the past few weeks as spreads widened 15+/- basis points, offset by a 15 basis point decline in Treasury yields. All-in cost remains in the 5.00 to 5.25 percent range.

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

5/6/11

Office

342

214

185

Retail

326

207

182

Multifamily

318

188

166

Industrial

333

201

181

Average Asking Spread

330

203

179

10-Year Treasury

3.83%

3.29%

3.15%

The Cushman & Wakefield Sonnenblick-Goldman survey for the period ended May 12  showed spreads narrowing 10 to 15 basis points and 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

3/2/11

3/31/11

4/28/11

5/12/11

Multifamily – Non-Agency

+270

+245

+245

+230

+225

Multifamily – Agency

+280

+250

+250

+205

+200

Regional Mall

+280

+260

+260

+260

+255

Grocery Anchored

+280

+260

+260

+245

+245

Strip and Power Centers

 

 

 

 

+265

Multi-Tenant Industrial

+270

+265

+265

+245

+245

CBD Office

+280

+260

+260

+250

+250

Suburban Office

+300

+270

+270

+260

+260

Full-Service Hotel

+320

+300

+300

+280

+275

Limited-Service Hotel

+400

+325

+325

+320

+320

5-Year Treasury

2.60%

2.17%

2.23%

2.05%

1.88%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

12/1610

3/2/11

3/31/11

4/12/11

5/12/11

Multifamily – Non-Agency

+190

+180

+180

+180

+180

Multifamily – Agency

+200

+185

+185

+185

+175

Regional Mall

+175

+180

+180

+180

+180

Grocery Anchor

+190

+185

+185

+181

+175

Strip and Power Centers

 

 

 

 

+190

Multi-Tenant Industrial

+190

+190

+190

+190

+185

CBD Office

+180

+180

+180

+180

+180

Suburban Office

+190

+190

+190

+190

+190

Full-Service Hotel

+290

+230

+230

+230

+220

Limited-Service Hotel

+330

+260

+260

+240

+240

10-Year Treasury

3.47%

3.47%

3.45%

3.51%

3.22%

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

3/31/11

4/12/11

4/28/11

5/12/11

Multifamily – Non-Agency

+250-300

+225-300

+225-325

+225-315

+205-300

Multifamily- Agency

+300

+250-300

+250-310

+250-310

+225-310

Regional Mall

+275-300

+225-300

+225-300

+225-300

+200-275

Grocery Anchored

+275-300

+225-300

+225-300

+225-300

+210-285

Strip and Power Centers

 

 

 

 

+230-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

+250-350

+235-325

CBD Office

+225-300

+225-300

+225-300

+225-300

+225-300

Suburban Office

+250-350

+275-350

+275-350

+250-350

+250-350

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%

0.24%

0.22%

0.21%

0.20%

3-Month LIBOR

0.30%

0.30%

0.28%

0.27%

0.26%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +8.79%
S & P 500 (2):+6.37%
NASDAQ (3): +6.62%
Russell 2000 (4):+6.64%
MSCI U.S. REIT (5):+8.69%
_____
 (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

5/13/2011

3-Month

0.12%

0.02%

6-Month

0.18%

0.07%

2 Year

0.59%

0.53%

5 Year

2.01%

1.83%

10 Year

3.29%

3.17%