Headlines

“Fitch Sees CMBS Defaults Stabilizing; Cumulative Rate [of default] to Top 12 Percent”

Talk about mixed messages! I think what Fitch is saying is that the pace of defaults is slowing and we will reach the high-water mark—12 percent plus this year.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders widened 5 to 10 basis points during the week, with all-in costs remaining in the 5.00+/- 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

5/20/11

Office

342

214

176

Retail

326

207

169

Multifamily

318

188

151

Industrial

333

201

166

Average Asking Spread

330

203

161

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 remaining 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): +7.456%
S & P 500 (2):+5.84%
NASDAQ (3): +5.43%
Russell 2000 (4):+6.68%
MSCI U.S. REIT (5):+10.78%

 (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%