The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points (0.05 percent) between August 13 and September 3. During the period, 10-year Treasury bond yields increased 9 basis points, with average all-in cost equal to 4.96 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

7/16

7/23

8/6

8/13

9/3

Office

342

221

237

241

244

241

Retail

326

214

225

229

234

229

Multifamily

318

198

204

209

215

209

Industrial

333

214

223

225

231

225

Average Asking Spread

330

211

222

226

231

226

10-Year Treasury

3.83%

2.99%

2.91%

2.67%

2.61%

2.70%

Source: Commercial Mortgage Alert; Trepp.

Spreads in the August 31 Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) came in slightly between August 12 and August 31, indicating that well underwritten commercial real estate loans remain sought after by financial institutions with all-in cost remaining below 5.0 percent.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 5 Year Commercial Real Estate Mortgages

1/6/10

6/23/10

7/28/10

8/12/10

8/31/10

Multifamily – Non-Agency

+360

+325

+310

+300

+300

Multifamily – Agency

+220

+240

+240

+240

+240

Regional Mall

+450

+360

+330

+300

+290

Strip/Power Center

+460

+360

+350

+325

+315

Multi-Tenant Industrial

+435

+330

+320

+300

+290

CBD Office

+435

+340

+330

+310

+320

Suburban Office

+465

+360

+340

+325

+325

Full-Service Hotel

+500

+440

+430

+400

+400

Limited-Service Hotel

+500

+460

+450

+450

+450

5-Year Treasury

2.60%

2.06%

1.71%

1.58%

1.41%

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

6/23/10

7/28/10

8/12/10

8/31/10

Multifamily – Non-Agency

+300

+190

+190

+180

+180

Multifamily – Agency

+220

+190

+190

+190

+190

Regional Mall

+350

+230

+220

+200

+200

Strip/Power Center

+350

+240

+230

+220

+210

Multi-Tenant Industrial

+420

+240

+235

+230

+205

CBD Office

+330

+240

+235

+210

+225

Suburban Office

+355

+250

+240

+225

+225

Full-Service Hotel

+550

+350

+350

+350

+350

Limited-Service Hotel

+575

+390

+380

380

+380

10-Year Treasury

3.85%

3.12%

2.97%

2.71%

2.61%

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

6/23/10

7/28/10

8/12/10

8/31/10

Multifamily – Non-Agency

+300 – 400

+275 – 300

+275-300

+275-300

+275-300

Multifamily- Agency

NA

NA

NA

NA

NA

Regional Mall

+475 – 600

+300 – 350

+300-350

+300-350

+275-350

Strip/Power Center

+450 – 650

+300 – 350

+300-350

+300-350

+275-350

Multi-Tenant Industrial

+400 – 500

+275 – 350

+275-350

+275-350

+250-350

CBD Office

+425

+275 – 350

+275-350

+275-350

+225-300

Suburban Office

+425

+300 – 375

+300-350

+300-350

+250-350

Full-Service Hotel

+600

+400 – 550

+400-550

+400-550

+375-550

Limited-Service Hotel

+750

+450 – 600

+450-600

+450-600

+450-600

1-Month LIBOR

0.23%

0.35%

0.32%

0.40%

0.26%

3-Month LIBOR

0.25%

0.54%

0.48%

0.62%

0.31%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public
Equity Capital Markets DJIA (1): +0.33%
S & P 500 (2):-0.50%
NASDAQ (3): -1.18%
MSCI U.S. REIT (5):+16.21%
______
(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

9/10/10

3-Month

.016%

0.15%

0.13%

6-Month

0.25%

0.23%

.018%

2 Year

0.99%

1.06%

0.56%

5 Year

2.60%

2.62%

1.58%

10 Year

3.85%

3.88%

2.79%

Source: Bloomberg LLP.