The following is a ranking by PERE (a firm specializing in the analysis of real estate investment funds) of capital raised ($178.396 billion) by real estate private equity funds.

Current Rank

 Firm

Capital Raised ($Billion)

 Prior Rank

1

The Blackstone Group

$29.100

1

2

Morgan Stanley Real Estate Investing

12.667

2

3

Goldman Sachs Real Estate Principal Investment Area

12.124

5

4

Tishman Speyer

12.104

3

5

Colony Capital

11.654

4

6

The Carlyle Group

9.639

8

7

Lone Star Funds

7.900

10

8

Beacon Capital Partners

6.580

6

9

Westbrook Partners

6.025

11

10

LaSalle Investment Management

5.864

7

11

MGPA

5.426

13

12

Starwood Capital Group

4.595

21

13

CBRE Global Investors

4.035

15

14

AREA Property Partners

3.963

12

15

Prudential Real Estate Investors

3.959

9

16

TA Associates Realty

3.782

23

17

Angelo, Gordon & Co.

3.683

28

18

Rockpoint Group

3.567

17

19

Shorenstein Properties

3.295

16

20

Bank of America Merrill Lynch Principal Investments

3.261

22

21

AEW Global

2.871

22

Hines

2.867

29

23

Brookfield Asset Management

2.728

24

Lubert-Adler Partners

2.604

18

25

JER Partners

2.496

26

Grove International Partners

2.464

30

27

GIM Group

2.371

28

Northwood Investors

2.310

29

DRA Advisors

2.250

30

Walton Street Capital

2.212

20

 

Total

$178.396

 

According to a data from Cushman & Wakefield, spreads on all mezzanine loans have tightened substantially (100 to 200 basis points) as capital sources are focusing on the higher yields offered by investment in the sector. We think spreads will continue to narrow as the “Wall of Capital” waiting to be invested becomes increasingly restive.

Investors

January

February

March

April

May

Hedge/Opportunity Funds

10-15%

10-15%

9-15%

9%-14%

9-14%

Investment Banks

9%-15%

9%-15%

9%-14%

9%-13%

9%-14%

Pension Funds, REITs, Life Insurers

7%-12%

8%-12%

7%-12%

7%-12%

7%-12%

Private Sources

8%-16%

8%-16%

7%-15%

7%-14%

7%-14%

Monday’s Numbers

The Trepp LLC survey showed spreads unchanged during the most recent survey period as the markets spent the week either waiting on the Facebook initial public offering or the imminent default on its obligations by some or all of the southern portion of Europe. Average spreads of 212 basis points over “sub-2” percent 10-year U.S. Treasury bonds remains attractive.

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

5/11/12

Month Earlier

Office

342

214

210

220

206

Retail

326

207

207

213

195

Multifamily

318

188

198

203

184

Industrial

333

201

205

210

189

Average Spread

330

203

205

212

194

10-Year Treasury

3.83%

3.29%

1.88%

1.76%

1.99%

Property Type

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

12/31/10

1/26/12

2/28/12

3/28/12

4/27/12

Multifamily – Non-Agency

+270

+240

+240

+230

+240

Multifamily – Agency

+280

+245

+210

+195

+200

Regional Mall

+280

+300

+300

+275

+275

Grocery Anchored

+280

+295

+290

+270

+270

Strip and Power Centers

 

+320

+315

+295

+295

Multi-Tenant Industrial

+270

+305

+310

+310

+285

CBD Office

+280

+310

+310

+295

+270

Suburban Office

+300

+320

+320

+310

+290

Full-Service Hotel

+320

+350

+350

+350

+340

Limited-Service Hotel

+400

+360

+360

+360

+350

5-Year Treasury

2.60%

0.89%

0.78%

0.83%

0.83%

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

1/26/12

2/28/12

3/28/12

4/27/12

Multifamily – Non-Agency

+190

+210

+210

+200

+210

Multifamily – Agency

+200

+205

+180

+165

+170

Regional Mall

+175

+245

+235

+275

+220

Grocery Anchor

+190

+240

+230

+270

+200

Strip and Power Centers

 

+255

+250

+290

+235

Multi-Tenant Industrial

+190

+255

+250

+280

+240

CBD Office

+180

+240

+320

+270

+220

Suburban Office

+190

+260

+250

+290

+245

Full-Service Hotel

+290

+290

+290

+325

+260

Limited-Service Hotel

+330

+315

+315

+345

+290

10-Year Treasury

3.47%

1.97%

1.90%

2.21%

1.95%

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

1/26/12

2/28/12

3/28/12

4/27/12

Multifamily – Non-Agency

+250-300

+200-250

+200-250

+200-250

+200-250

Multifamily- Agency

+300

+220-265

+220-265

+220-265

+220-265

Regional Mall

+275-300

+210-265

+200-265

+200-265

+200-265

Grocery Anchored

+275-300

+200-275

+200-275

+200-275

+200-275

Strip and Power Centers

 

+225-300

+225-300

+225-300

+225-300

Multi-Tenant Industrial

+250-350

+225-305

+225-305

+225-305

+225-305

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

+350-425

+275-400

+275-400

+250-400

Limited-Service Hotel

+450-600

+400-500

+350-550

+325-450

+325-450

1-Month LIBOR

0.26%

0.27%

0.24%

0.24%

0.24%

3-Month LIBOR

0.30%

0.55%

0.49%

0.47%

0.47%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +1.46%
S & P 500 (2): +2.99%
NASDAQ (3): +6.67%
Russell 2000 (4):+0.86%
Morgan Stanley U.S. REIT (5):+4.88%
_____
 (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

5/19/2012

3-Month

0.12%

0.01%

0.08%

6-Month

0.18%

0.06%

0.14%

2 Year

0.59%

0.24%

0.29%

5 Year

2.01%

0.83%

0.75%

7 Year

 

 

1.16%

10 Year

3.29%

1.88%

1.72%

Key Rates (in Percentages)

 

Current

1 Mo. Prior

3 Mo. Prior

6 Mo. Prior

1 Yr. Prior

Fed Funds Rate

0.15

0.16

0.11

0.08

0.11

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

8.10

8.20

8.30

8.90

9.00

1-Month Libor

0.24

0.24

0.25

0.26

0.20

3-Month Libor

0.47

0.47

0.49

0.49

0.26