The Trepp LLC survey showed spreads narrowing 3+/- basis points during a quiet week leading up to a three-day weekend. Average spreads of 215 basis points combined with “sub-2” percent 10-year U.S. Treasury bonds remains attractive to say the least.

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

6/18/12

Month Earlier

Office

342

214

210

223

205

Retail

326

207

207

216

198

Multifamily

318

188

198

209

186

Industrial

333

201

205

213

190

Average Spread

330

203

205

215

195

10-Year Treasury

3.83%

3.29%

1.88%

1.72%

1.98%

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): +1.94%
S & P 500 (2): +4.79%
NASDAQ (3): +8.92%
Russell 2000 (4):+3.44%
Morgan Stanley U.S. REIT (5):+7.57%
_____
 (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

12/31/11

5/26/2012

3-Month

0.12%

0.01%

0.08%

6-Month

0.18%

0.06%

0.13%

2 Year

0.59%

0.24%

0.29%

5 Year

2.01%

0.83%

0.76%

7 Year

 

 

1.17%

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

0.17

0.15

0.11

0.07

.010

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

0.24

0.26

0.19

3-Month Libor

0.47

0.47

0.49

0.52

0.25