The Trepp, LLC survey showed spreads coming in as much as 10 basis points, an incredible amount given the turbulence affecting the credit markets, i.e., LIBORgate; Euro-crises; increased CMBS delinquencies, and widening spreads in CMBS new issues, to name just a few. Maybe it’s the heat as no one seems to be using these spreads to actually price borrower cost, relying solely on floor pricing.

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

6/28/12

Month Earlier

Office

342

214

210

229

233

Retail

326

207

207

224

231

Multifamily

318

188

198

218

222

Industrial

333

201

205

222

226

Average Spread

330

203

205

223

228

10-Year Treasury

3.83%

3.29%

1.88%

1.69%

1.74%

The Cushman & Wakefield Equity, Debt, and Structured Finance Commercial Mortgage Spread survey showed spreads for 10-year fixed rate mortgages unchanged during the survey period.

Property Type

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

12/31/10

3/28/12

4/27/12

5/30/12

6/28/12

Multifamily – Non-Agency

+270

+230

+240

+250

+245

Multifamily – Agency

+280

+195

+200

+210

+225

Regional Mall

+280

+275

+275

+300

+300

Grocery Anchored

+280

+270

+270

+295

+295

Strip and Power Centers

 

+295

+295

+320

+320

Multi-Tenant Industrial

+270

+310

+285

+305

+305

CBD Office

+280

+295

+270

+295

+300

Suburban Office

+300

+310

+290

+315

+315

Full-Service Hotel

+320

+350

+340

+360

+360

Limited-Service Hotel

+400

+360

+350

+370

+370

5-Year Treasury

2.60%

0.83%

0.83%

0.69%

0.69%

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

3/28/12

4/27/12

5/30/12

6/28/12

Multifamily – Non-Agency

+190

+200

+210

+220

+220

Multifamily – Agency

+200

+165

+170

+190

+200

Regional Mall

+175

+275

+220

+245

+245

Grocery Anchor

+190

+270

+200

+230

+235

Strip and Power Centers

 

+290

+235

+260

+255

Multi-Tenant Industrial

+190

+280

+240

+260

+260

CBD Office

+180

+270

+220

+250

+250

Suburban Office

+190

+290

+245

+270

+265

Full-Service Hotel

+290

+325

+260

+295

+290

Limited-Service Hotel

+330

+345

+290

+320

+310

10-Year Treasury

3.47%

2.21%

1.95%

1.62%

1.58%

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

3/28/12

4/27/12

5/30/12

6/28/12

Multifamily – Non-Agency

+250-300

+200-250

+200-250

+200-250

+200-260

Multifamily- Agency

+300

+220-265

+220-265

+220-265

+220-265

Regional Mall

+275-300

+200-265

+200-265

+210-275

+210-275

Grocery Anchored

+275-300

+200-275

+200-275

+205-275

+210-275

Strip and Power Centers

 

+225-300

+225-300

+225-300

+225-300

Multi-Tenant Industrial

+250-350

+225-305

+225-305

+235-305

+235-305

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

+275-400

+250-400

+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%

0.47%

* A dash (-) indicates a range.

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

Year-to-Date Public Equity Capital Markets

DJIA (1): +4.54%
S & P 500 (2): +7.72%
NASDAQ (3): +12.75%
Russell 2000 (4):+9.02%
Morgan Stanley U.S. REIT (5):+13.93%

 (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

7/7/12

3-Month

0.12%

0.01%

0.07%

6-Month

0.18%

0.06%

0.14%

2 Year

0.59%

0.24%

0.27%

5 Year

2.01%

0.83%

0.64%

7 Year

 

 

1.01%

10 Year

3.29%

1.88%

1.55%

                                                  

Key Rates (in Percentages)

 

Current

1 Mo. Prior

3 Mo. Prior

6 Mo. Prior

1 Yr. Prior

Fed Funds Rate

0.18

0.16

0.11

0.07

0.10

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

8.20

8.20

8.20

8.50

9.10

1-Month Libor

0.25

0.24

0.24

0.30

0.19

3-Month Libor

0.46

0.47

0.47

0.58

0.25