Headlines

“CMBS Delinquency Rate Spikes in July – Sets All-Time Record for Highest Rate With Largest Increase in Over a Year”

According to Trepp:

  • Overall U.S. delinquency rate increased to 9.88 percent, an increase of 51 basis points over the prior period;
  • Percentage of loans seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) increased 31 basis points over the prior month to 9.14 percent.

“REITs, Up 11.7 Percent Year-to-Date at July 31st, Close Down 1.51Percent Year-to-Date on August 12th

Talk about volatility; REITs got slammed like everyone else as investors seemed to have no interest in equities and/or hard assets.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders showed spreads widening an average of 20, repeat 20, basis points during the survey period as financing circles the field, waiting for word from the tower that it’s safe to land and for the markets to decide if it’s 1998 or 2007 again (and whether the “dislocation” will last three months or three years).

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

8/5/11

Office

342

214

200

Retail

326

207

195

Multifamily

318

188

182

Industrial

333

201

192

Average Asking Spread

330

203

192

10-Year Treasury

3.83%

3.29%

2.56%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended August 11th showed fixed rate spreads widening as much as 40, repeat 40, basis points while floating rate spreads widened by 20 basis points at the low end of the range.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

3/31/11

7/7/11

7/28/11

8/11/11

Multifamily – Non-Agency

+270

+245

+230

+250

+255

Multifamily – Agency

+280

+250

+220

+240

+265

Regional Mall

+280

+260

+265

+280

+290

Grocery Anchored

+280

+260

+250

+270

+285

Strip and Power Centers

 

 

+270

+290

+300

Multi-Tenant Industrial

+270

+265

+260

+275

+295

CBD Office

+280

+260

+260

+275

+290

Suburban Office

+300

+270

+270

+295

+300

Full-Service Hotel

+320

+300

+285

+2300

+320

Limited-Service Hotel

+400

+325

+310

+320

+340

5-Year Treasury

2.60%

2.23%

1.64%

1.49%

0.97%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 10 Year Commercial Real Estate Mortgages

12/1610

3/31/11

7/7/11

7/28/11

8/11/11

Multifamily – Non-Agency

+190

+180

+185

+195

+240

Multifamily – Agency

+200

+185

+180

+190

+245

Regional Mall

+175

+180

+190

+205

+240

Grocery Anchor

+190

+185

+200

+195

+230

Strip and Power Centers

 

 

+195

+210

+250

Multi-Tenant Industrial

+190

+190

+190

+230

+240

CBD Office

+180

+180

+190

+225

+240

Suburban Office

+190

+190

+195

+235

+260

Full-Service Hotel

+290

+230

+235

+250

+275

Limited-Service Hotel

+330

+260

+250

+270

+295

10-Year Treasury

3.47%

3.45%

3.09%

2.97%

2.23%

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

7/7/11

7/28/11

8/11/11

Multifamily – Non-Agency

+250-300

+225-325

+200-250

+200-250

+220-260

Multifamily- Agency

+300

+250-310

+220-260

+220-260

+230-270

Regional Mall

+275-300

+225-300

+205-270

+205-270

+220-270

Grocery Anchored

+275-300

+225-300

+205-275

+205-275

+210-275

Strip and Power Centers

 

 

+225-300

+225-300

+235-300

Multi-Tenant Industrial

+250-350

+250-350

+230-325

+230-325

+250-325

CBD Office

+225-300

+225-300

+215-300

+225-300

+235-300

Suburban Office

+250-350

+275-350

+250-325

+250-325

+265-325

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%

0.22%

0.19%

0.19%

0.21%

3-Month LIBOR

0.30%

0.28%

0.25%

0.25%

0.29%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): -2.78%
S & P 500 (2):-6.30%
NASDAQ (3): -5.29%
Russell 2000 (4):-10.990%
MSCI U.S. REIT (5):-1.51%
_____
 (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

8/12/2011

3-Month

0.12%

0.01%

6-Month

0.18%

0.07%

2 Year

0.59%

0.19%

5 Year

2.01%

0.96%

10 Year

3.29%

2.25%