Headlines

“Fed Requires Living Wills for Big Banks”

The Federal Reserve announced that it had signed off on a new rule requiring the nation’s largest banks to have “living wills” which would provide directional assistance in dismantling them if they failed. The rule had been previously approved by the FDIC. Banks with more than $50 billion in total assets will be subject to the rule.

“Equity REITs Advance in October”

According to the FTSE/NAREIT Equity REIT Index, equity REITs posted a total return of 14.28 percent in October; year-to-date, equity REITs are up 7.36 percent. The average dividend yield as of October 31 was 3.61 percent.

Monday’s Numbers

The Trepp LLC survey showed spreads continuing to narrow during the most recent survey period, evidence that the market sees mortgage lending as one of the the best ways to play out the Euro-crises.

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

10/28/11

Office

342

214

190

Retail

326

207

183

Multifamily

318

188

198

Industrial

333

201

190

Average Asking Spread

330

203

190

10-Year Treasury

3.83%

3.29%

2.29%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ending November 3rd  showed spreads for 10-year mortgages basically unchanged, i.e., up five basis points here, down five basis points there.

Property Type

Mid-Point of Fixed Rate Commercial Mortgage

Spreads For 5 Year Commercial Real Estate Mortgages

12/31/10

3/31/11

6/30/11

9/30/11

11/3/11

Multifamily – Non-Agency

+270

+245

+230

+250

+265

Multifamily – Agency

+280

+250

+210

+255

+255

Regional Mall

+280

+260

+265

+300

+310

Grocery Anchored

+280

+260

+250

+290

+300

Strip and Power Centers

 

 

+270

+310

+320

Multi-Tenant Industrial

+270

+265

+255

+295

+315

CBD Office

+280

+260

+255

+290

+315

Suburban Office

+300

+270

+270

+310

+330

Full-Service Hotel

+320

+300

+275

+335

+350

Limited-Service Hotel

+400

+325

+310

+345

+360

5-Year Treasury

2.60%

2.23%

1.52%

0.99%

0.93%

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

3/31/11

6/30/11

9/30/11

11/3/11

Multifamily – Non-Agency

+190

+180

+185

+240

+240

Multifamily – Agency

+200

+185

+175

+235

+235

Regional Mall

+175

+180

+190

+250

+255

Grocery Anchor

+190

+185

+200

+240

+245

Strip and Power Centers

 

 

+195

+255

+260

Multi-Tenant Industrial

+190

+190

+190

+250

+245

CBD Office

+180

+180

+190

+250

+255

Suburban Office

+190

+190

+195

+255

+265

Full-Service Hotel

+290

+230

+225

+300

+300

Limited-Service Hotel

+330

+260

+245

+325

+305

10-Year Treasury

3.47%

3.45%

2.94%

2.01%

2.05%

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

3/31/11

6/30/11

9/30/11

11/3/11

Multifamily – Non-Agency

+250-300

+225-325

+200-260

+225-250

+200-250

Multifamily- Agency

+300

+250-310

+220-260

+230-265

+220-265

Regional Mall

+275-300

+225-300

+205-270

+225-275

+210-275

Grocery Anchored

+275-300

+225-300

+205-275

+215-275

+205-275

Strip and Power Centers

 

 

+225-300

+225-300

+220-300

Multi-Tenant Industrial

+250-350

+250-350

+230-325

+250-325

+250-325

CBD Office

+225-300

+225-300

+215-300

+240-300

+230-300

Suburban Office

+250-350

+275-350

+250-325

+265-325

+250-325

Full-Service Hotel

+300-450

+350-450

+350-450

+350-450

+350-425

Limited-Service Hotel

+450-600

+400-500

+400-500

+400-500

+400-500

1-Month LIBOR

0.26%

0.22%

0.19%

0.24%

0.25%

3-Month LIBOR

0.30%

0.28%

0.25%

0.37%

0.44%

* A dash (-) indicates a range.

Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA (1): +3.50%
S & P 500 (2)-0.35%
NASDAQ (3): +1.25%
Russell 2000 (4):-4.75%
MSCI U.S. REIT (5):+3.71%
_____
 (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

11/05/11

3-Month

0.12%

0.01%

6-Month

0.18%

0.03%

2 Year

0.59%

0.22%

5 Year

2.01%

0.87%

10 Year

3.29%

2.03%