The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders narrowed slightly in response to widening in the yield of 10-year Treasury bonds. There seems to be an all-in cost of 5.0% “glass ceiling” in place as loan spreads moved in and Treasury spreads widened to accommodate changes in spreads and/or yields. For the survey period, average all-in cost equaled 4.87 percent.

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

10/15

10/22

10/29

11/5

11/12

Office

342

248

244

253

228

221

Retail

326

233

230

234

213

209

Multifamily

318

207

212

205

198

195

Industrial

333

231

229

226

211

206

Average Asking Spread

330

231

229

230

213

208

10-Year Treasury

3.83%

2.55%

2.60%

2.53%

2.53%

2.79%

Source: Commercial Mortgage Alert; Trepp.

Changes in spreads in the November 11th Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) mixed and property sector specific with all-in costs supporting our 10-year term, 5.0 percent, glass ceiling thesis.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

1/6/10

9/16/10

10/13/10

10/27/10

11/11/10

Multifamily – Non-Agency

+360

+280

+280

+280

+280

Multifamily – Agency

+220

+240

+240

+250

+280

Regional Mall

+450

+290

+280

+290

+305

Strip/Power Center

+460

+300

+285

+295

+280

Multi-Tenant Industrial

+435

+280

+275

+275

+280

CBD Office

+435

+270

+270

+270

+280

Suburban Office

+465

+300

+300

+300

+300

Full-Service Hotel

+500

+400

+375

+375

+350

Limited-Service Hotel

+500

+450

+450

+450

+425

5-Year Treasury

2.60%

1.51%

1.17%

1.14%

1.11%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

1/6/10

9/16/10

10/13/10

10/27/10

11/11/10

Multifamily – Non-Agency

+300

+180

+180

+180

+180

Multifamily – Agency

+220

+190

+190

+190

+190

Regional Mall

+350

+200

+200

+200

+215

Strip/Power Center

+350

+200

+200

+205

+220

Multi-Tenant Industrial

+420

+200

+190

+190

+190

CBD Office

+330

+190

+190

+190

+190

Suburban Office

+355

+220

+220

+220

+200

Full-Service Hotel

+550

+350

+340

+340

+335

Limited-Service Hotel

+575

+380

+380

+380

+350

10-Year Treasury

3.85%

2.76%

2.45%

2.71%

2.72%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Floating-Rate Commercial Mortgage

Spreads For 3 – 5 Commercial Real Estate Year Mortgages

1/6/10

9/16/10

10/13/10

10/27/10

11/11/10

Multifamily – Non-Agency

+300 – 400

+275-325

+250-300

+275-325

+250-300

Multifamily- Agency

NA

NA

NA

NA

300

Regional Mall

+475 – 600

+275-350

+275-350

+275-350

+275-350

Strip/Power Center

+450 – 650

+275-350

+275-350

+275-350

+275-350

Multi-Tenant Industrial

+400 – 500

+250-350

+250-350

+250-350

+250-350

CBD Office

+425

+225-300

+225-300

+225-300

+225-300

Suburban Office

+425

+250-350

+250-350

+250-350

+250-350

Full-Service Hotel

+600

+375-500

+375-500

+375-500

+375-500

Limited-Service Hotel

+750

+450-550

+450-600

+450-600

+450-600

1-Month LIBOR

0.23%

0.26%

0.26%

0.26%

0.25%

3-Month LIBOR

0.25%

0.31%

0.29%

0.29%

0.29%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +7.44%
S & P 500 (2):+7.59%
NASDAQ (3): +10.97%
Russell 2000 (4): +15.83%
MSCI U.S. REIT (5):+21.56%

 (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

1/6/10

4/9/10

9/30/10

11/21/10

3-Month

.016%

0.15%

0.15%

0.15%

6-Month

0.25%

0.23%

0.19%

0.18%

2 Year

0.99%

1.06%

0.41%

0.50%

5 Year

2.60%

2.62%

1.26%

1.52%

10 Year

3.85%

3.88%

2.51%

2.87%

Source: Bloomberg LLP.