Headlines

“Extensions Causing Pileup of Maturing Loans”

The following is a portion of an article which appeared in this week’s issue of Commercial Mortgage Alert.

“Loan extensions by banks and other lenders have created a massive overhang of maturing commercial real estate loans—many of which are heavily overleveraged. CoStar projects a whopping $850 billion of commercial mortgages, multifamily mortgages, and construction loans are now due to mature this year. That’s more than twice as high as originally scheduled because of rollovers from previous years.”

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged during the most recent survey period with financing available in the 5 percent +/- 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

7/8/11

Office

342

214

181

Retail

326

207

172

Multifamily

318

188

161

Industrial

333

201

166

 

 

 

Average Asking Spread

330

203

171

 

 

 

10-Year Treasury

3.83%

3.29%

3.03%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended July 7 showed fixed and floating rate spreads remaining unchanged in most property sectors during the survey period with financing remaining available at attractive and affordable rates.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/16/10

3/31/11

6/2/11

6/16/11

7/7/11

Multifamily – Non-Agency

+270

+245

+225

+230

+230

Multifamily – Agency

+280

+250

+200

+210

+220

Regional Mall

+280

+260

+255

+265

+265

Grocery Anchored

+280

+260

+245

+250

+250

Strip and Power Centers

 

 

+265

+270

+270

Multi-Tenant Industrial

+270

+265

+245

+255

+260

CBD Office

+280

+260

+250

+255

+260

Suburban Office

+300

+270

+260

+270

+270

Full-Service Hotel

+320

+300

+265

+275

+285

Limited-Service Hotel

+400

+325

+300

+310

+310

5-Year Treasury

2.60%

2.23%

1.62%

1.52%

1.64%

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

6/2/11

6/16/11

7/7/11

Multifamily – Non-Agency

+190

+180

+180

+185

+185

Multifamily – Agency

+200

+185

+170

+175

+180

Regional Mall

+175

+180

+180

+190

+190

Grocery Anchor

+190

+185

+175

+200

+200

Strip and Power Centers

 

 

+190

+195

+195

Multi-Tenant Industrial

+190

+190

+185

+190

+190

CBD Office

+180

+180

+180

+190

+190

Suburban Office

+190

+190

+190

+195

+195

Full-Service Hotel

+290

+230

+220

+225

+235

Limited-Service Hotel

+330

+260

+240

+245

+250

10-Year Treasury

3.47%

3.45%

2.99%

2.94%

3.09%

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

6/2/11

6/16/11

7/7/11

Multifamily – Non-Agency

+250-300

+225-325

+200-275

+200-260

+200-250

Multifamily- Agency

+300

+250-310

+220-270

+220-260

+220-260

Regional Mall

+275-300

+225-300

+205-275

+205-270

+205-270

Grocery Anchored

+275-300

+225-300

+215-285

+205-275

+205-275

Strip and Power Centers

 

 

+235-300

+225-300

+225-300

Multi-Tenant Industrial

+250-350

+250-350

+230-325

+230-325

+230-325

CBD Office

+225-300

+225-300

+215-300

+215-300

+215-300

Suburban Office

+250-350

+275-350

+250-325

+250-325

+250-325

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%

0.19%

3-Month LIBOR

0.30%

0.28%

0.25%

0.25%

0.25%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +7.79%
S & P 500 (2):+4.65%
NASDAQ (3): +5.16%
Russell 2000 (4):+5.76%
MSCI U.S. REIT (5):+10.57%
_____
 (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

7/16/2011

3-Month

0.12%

0.01%

6-Month

0.18%

0.04%

2 Year

0.59%

0.35%

5 Year

2.01%

1.44%

10 Year

3.29%

2.91%