Headlines

The following appeared in a recent e-edition of Standard & Poor’s daily asset backed securities research. 

 
“CMBS: Modest New Issuance Growth; 2007 Maturities Struggling”

“The current CMBS pipeline indicates modest year-over-year new issuance growth, while the latest payoff data suggests that 2007 vintage loans are struggling to refinance. Adding the year-to-date new issuance figure of $1.3billion to the current Commercial Mortgage Alert pipeline of 14 deals totaling $10.8 billion through April indicates an annualized pace of $36-$37billion in 2012, which represents about 10-15% year-over-year growth, and slightly above our [Standard & Poor’s] forecast of $35billion. Meanwhile, only 27% of 2007 vintage loans that came due in January paid off, and nearly half of the total was attributed to one large loan, according to Trepp.

Monday’s Numbers

During the survey period, the Trepp LLC survey indicated spreads widening five to 10 basis points.

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

1/27/12

Month Earlier

Office

342

214

210

222

210

Retail

326

207

207

215

207

Multifamily

318

188

198

209

198

Industrial

333

201

205

212

205

Average Spread

330

203

205

215

205

10-Year Treasury

3.83%

3.29%

1.88%

1.89%

1.92%

The Cushman & Wakefield Sonnenblick-Goldman Survey shows rates unchanged to down five basis points. Lenders seem to be going about their business, reacting to market events as necessary.

Property Type

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

12/31/10

1/5/12

1/26/12

Multifamily – Non-Agency

+270

+245

+240

Multifamily – Agency

+280

+255

+245

Regional Mall

+280

+300

+300

Grocery Anchored

+280

+295

+295

Strip and Power Centers

 

+320

+320

Multi-Tenant Industrial

+270

+305

+310

CBD Office

+280

+310

+310

Suburban Office

+300

+320

+320

Full-Service Hotel

+320

+350

+350

Limited-Service Hotel

+400

+360

+360

5-Year Treasury

2.60%

0.89%

0.78%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

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

12/31/10

1/5/12

1/26/12

Multifamily – Non-Agency

+190

+205

+210

Multifamily – Agency

+200

+200

+205

Regional Mall

+175

+245

+245

Grocery Anchor

+190

+240

+240

Strip and Power Centers

 

+255

+255

Multi-Tenant Industrial

+190

+245

+255

CBD Office

+180

+250

+240

Suburban Office

+190

+265

+260

Full-Service Hotel

+290

+300

+290

Limited-Service Hotel

+330

+310

+315

10-Year Treasury

3.47%

2.00%

1.97%

Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type

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

12/31/10

1/5/12

1/26/12

Multifamily – Non-Agency

+250-300

+200-250

+200-250

Multifamily- Agency

+300

+220-265

+220-265

Regional Mall

+275-300

+250-350

+210-265

Grocery Anchored

+275-300

+240-325

+200-275

Strip and Power Centers

 

+250-350

+225-300

Multi-Tenant Industrial

+250-350

+270-350

+225-305

CBD Office

+225-300

+275-350

+225-300

Suburban Office

+250-350

+300-350

+250-325

Full-Service Hotel

+300-450

+375-475

+350-425

Limited-Service Hotel

+450-600

+375-550

+400-500

1-Month LIBOR

0.26%

0.30%

0.27%

3-Month LIBOR

0.30%

0.58%

0.55%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +5.28%
S & P 500 (2): +6.94%
NASDAQ (3): +11.54%
Russell 2000 (4):+12.18%
Morgan Stanley U.S. REIT (5):+8.95%

 (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

2/5/12

3-Month

0.12%

0.01%

.07%

6-Month

0.18%

0.06%

.09%

2 Year

0.59%

0.24%

.23%

5 Year

2.01%

0.83%

.77%

10 Year

3.29%

1.88%

1.92%