Headlines

Headlines and quotes we publish are intended to convey a sense of the terms and conditions present in the real estate capital markets.

“China Shapes an All-Asia Financial Center”

This rates a capital “A” for pretty amazing.

The global banker’s vocabulary was expanded last year with the addition of three new terms, as follows:

  • “Redbacks” (offshore deposits of Renminbi (China’s currency) tradable in Hong Kong);
  • “Dim Sum Bonds” (bonds denominated in offshore Renminbi); and
  • “Synthetic RMB bonds” (bonds denominated in offshore Renminbi, but paid in US dollars).

And in April 2011, the first Renminbi-denominated initial public offering was launched in Hong Kong.

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. All-in cost remains in 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

4/29/11

Office

342

214

177

Retail

326

207

169

Multifamily

318

188

151

Industrial

333

201

166

Average Asking Spread

330

203

166

10-Year Treasury

3.83%

3.29%

3.29%

The Cushman & Wakefield Sonnenblick-Goldman survey for the period ended April 28 showed spreads narrowing 10 to as much as 25 basis points; it’s hard to imagine mortgages being priced more attractively.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

2/15/11

3/2/11

3/31/11

4/28/11

Multifamily – Non-Agency

+270

+250

+245

+245

+230

Multifamily – Agency

+280

+255

+250

+250

+205

Regional Mall

+280

+260

+260

+260

+260

Grocery Anchored

+280

+260

+260

+260

+245

Multi-Tenant Industrial

+270

+270

+265

+265

+245

CBD Office

+280

+260

+260

+260

+250

Suburban Office

+300

+270

+270

+270

+260

Full-Service Hotel

+320

+300

+300

+300

+280

Limited-Service Hotel

+400

+330

+325

+325

+320

5-Year Treasury

2.60%

2.36%

2.17%

2.23%

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

3/2/11

3/31/11

4/12/11

4/28/11

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

Multi-Tenant Industrial

+190

+190

+190

+190

+180

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%

3.34%

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

3/2/11

3/31/11

4/12/11

4/28/11

Multifamily – Non-Agency

+250-300

+225-300

+225-300

+225-325

+225-315

Multifamily- Agency

+300

+250-300

+250-300

+250-310

+250-310

Regional Mall

+275-300

+225-275

+225-300

+225-300

+225-300

Grocery Anchored

+275-300

+225-275

+225-300

+225-300

+225-300

Multi-Tenant Industrial

+250-350

+250-350

+250-350

+250-350

+250-350

CBD Office

+225-300

+225-300

+225-300

+225-300

+225-300

Suburban Office

+250-350

+275-350

+275-350

+275-350

+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%

0.26%

0.24%

0.22%

0.21%

3-Month LIBOR

0.30%

0.31%

0.30%

0.28%

0.27%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +9.17%
S & P 500 (2):+6.56%
NASDAQ (3): +6.58%
Russell 2000 (4):+6.34%
MSCI U.S. REIT (5):+8.76%
_____
 (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

5/7/2011

3-Month

0.12%

0.01%

6-Month

0.18%

0.06%

2 Year

0.59%

0.55%

5 Year

2.01%

1.86%

10 Year

3.29%

3.15%