The Trepp, LLC survey showed commercial mortgage spreads widening as much as four basis points during the survey period. Floor pricing in the 4 percent to 5 percent range continues in effect as the market for newly issued commercial mortgage-backed securities strengthened. Year-to-date volume equals $24.2 billion with the over-under for full year 2012 volume in the mid-$30 billion 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

12/31/11

8/3/12

Week Earlier

Month Earlier

Office

342

214

210

245

244

238

Retail

326

207

207

232

238

229

Multifamily

318

188

198

225

229

222

Industrial

333

201

205

233

234

226

Average Spread

330

203

205

234

236

229

10-Year Treasury

3.83%

3.29%

1.88%

1.66%

1.56%

1.67%

The Cushman & Wakefield Equity, Debt, and Structured Finance Commercial Mortgage Spread monthly survey of commercial mortgage spreads showed spreads for 10-year, fixed rate mortgages, coming in 5 basis points, reinforcing our comments above regarding floor pricing by lenders.

Property Type

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

12/31/10

4/27/12

5/30/12

6/28/12

2/26/12

Multifamily – Non-Agency

+270

+240

+250

+245

+245

Multifamily – Agency

+280

+200

+210

+225

+225

Regional Mall

+280

+275

+300

+300

+295

Grocery Anchored

+280

+270

+295

+295

+290

Strip and Power Centers

 

+295

+320

+320

+315

Multi-Tenant Industrial

+270

+285

+305

+305

+300

CBD Office

+280

+270

+295

+300

+295

Suburban Office

+300

+290

+315

+315

+315

Full-Service Hotel

+320

+340

+360

+360

+360

Limited-Service Hotel

+400

+350

+370

+370

+370

5-Year Treasury

2.60%

0.83%

0.69%

0.69%

0.57%

Source: Cushman & Wakefield Equity, Debt, and Structured Finance.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage
Spreads For 10 Year Commercial Real Estate Mortgages

12/31/10

4/27/12

5/30/12

6/28/12

7/26/12

Multifamily – Non-Agency

+190

+210

+220

+220

+220

Multifamily – Agency

+200

+170

+190

+200

+210

Regional Mall

+175

+220

+245

+245

+235

Grocery Anchor

+190

+200

+230

+235

+230

Strip and Power Centers

 

+235

+260

+255

+250

Multi-Tenant Industrial

+190

+240

+260

+260

+255

CBD Office

+180

+220

+250

+250

+245

Suburban Office

+190

+245

+270

+265

+265

Full-Service Hotel

+290

+260

+295

+290

+290

Limited-Service Hotel

+330

+290

+320

+310

+310

10-Year Treasury

3.47%

1.95%

1.62%

1.58%

1.42%

Source: Cushman & Wakefield Equity, Debt, and Structured Finance.

Property Type

Mid-Point of Floating-Rate Commercial Mortgage
Spreads For 3 – 5 Commercial Real Estate Year Mortgages

12/31/10

4/27/12

5/30/12

6/28/12

7/26/12

Multifamily – Non-Agency

+250-300

+200-250

+200-250

+200-260

+200-260

Multifamily- Agency

+300

+220-265

+220-265

+220-265

+220-265

Regional Mall

+275-300

+200-265

+210-275

+210-275

+210-275

Grocery Anchored

+275-300

+200-275

+205-275

+210-275

+210-275

Strip and Power Centers

 

+225-300

+225-300

+225-300

+225-300

Multi-Tenant Industrial

+250-350

+225-305

+235-305

+235-305

+230-305

CBD Office

+225-300

+225-300

+225-300

+225-300

+225-300

Suburban Office

+250-350

+250-325

+250-325

+250-325

+250-325

Full-Service Hotel

+300-450

+250-400

+275-400

+275-400

+275-400

Limited-Service Hotel

+450-600

+325-450

+325-450

+325-450

+325-450

1-Month LIBOR

0.26%

0.24%

0.24%

0.24%

0.24%

3-Month LIBOR

0.30%

0.47%

0.47%

0.47%

0.46%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Equity, Debt, and Structured Finance.

Year-to-Date Public Equity Capital Markets

DJIA (1): +8.11%
S & P 500 (2): +11.79%
NASDAQ (3): +15.96%
Russell 2000 (4):+8.19%
Morgan Stanley U.S. REIT (5):+12.81%

 (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

12/31/11

8/4/12

3-Month

0.12%

0.01%

0.08%

6-Month

0.18%

0.06%

0.13%

2 Year

0.59%

0.24%

0.24%

5 Year

2.01%

0.83%

0.66%

7 Year

 

 

1.06%

10 Year

3.29%

1.88%

1.56%

                                 

Key Rates (in Percentages)

 

Current

1 Mo. Prior

3 Mo. Prior

6 Mo. Prior

1 Yr. Prior

Fed Funds Rate

0.14

0.17

0.11

0.12

0.13

Federal Reserve Target Rate

0.25

0.25

0.25

0.25

0.25

Prime Rate

3.25

3.25

3.25

3.25

3.25

US Unemployment Rate

8.30

8.20

8.10

8.30

9.10

1-Month Libor

0.24

0.25

0.24

0.25

0.21

3-Month Libor

0.44

0.46

0.47

0.51

0.28