Monday’s Numbers: April 18, 2011

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders widened slightly as a result of a widening in spreads for 10-year U.S. Treasury bonds. Average rates closed the reporting period at 5.24%. The Cushman & Wakefield Sonnenblick-Goldman survey ended March literally where it started with spreads in the 250 basis point range (for 5-year loans) and 185 basis point range (for 10-year loans).

April 18, 2011

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Headlines and quotes we publish are intended to convey a sense of the terms and conditions present in the real estate capital markets.

“Bank Mortgage Portfolios Fell 8 Percent Last Year”

According to Trepp, real estate portfolios at the nation’s 100 largest banks declined 8 percent as de-leveraging through runoff of existing loans as they matured and reduced origination. No surprise: the decrease can be traced entirely to reduced construction and land loans.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders widened slightly as a result of a widening in spreads for 10-year U.S. Treasury bonds. Average rates closed the reporting period at 5.24%.

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	4/8/11
Office	342	214	178
Retail	326	207	169
Multifamily	318	188	150
Industrial	333	201	165
Average Asking Spread	330	203	166
10-Year Treasury	3.83%	3.29%	3.58%

The Cushman & Wakefield Sonnenblick-Goldman survey ended March literally where it started with spreads in the 250 basis point range (for 5-year loans) and 185 basis point range (for 10-year loans).

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	12/16/10	2/15/11	3/2/11	3/31/11	4/12/11
Multifamily - Non-Agency	+270	+250	+245	+245	+245
Multifamily – Agency	+280	+255	+250	+250	+240
Regional Mall	+280	+260	+260	+260	+260
Grocery Anchored	+280	+260	+260	+260	+260
Multi-Tenant Industrial	+270	+270	+265	+265	+265
CBD Office	+280	+260	+260	+260	+260
Suburban Office	+300	+270	+270	+270	+270
Full-Service Hotel	+320	+300	+300	+300	+290
Limited-Service Hotel	+400	+330	+325	+325	+320
5-Year Treasury	2.60%	2.36%	2.17%	2.23%	2.23%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages
	12/1610	2/15/11	3/2/11	3/31/11	4/12/11
Multifamily - Non-Agency	+190	+180	+180	+180	+180
Multifamily – Agency	+200	+190	+185	+185	+185
Regional Mall	+175	+180	+180	+180	+180
Grocery Anchor	+190	+185	+185	+185	+181
Multi-Tenant Industrial	+190	+190	+190	+190	+190
CBD Office	+180	+180	+180	+180	+180
Suburban Office	+190	+190	+190	+190	+190
Full-Service Hotel	+290	+240	+230	+230	+2320
Limited-Service Hotel	+330	+260	+260	+260	+240
10-Year Treasury	3.47%	3.63%	3.47%	3.45%	3.51%
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	2/15/11	3/2/11	3/31/11	4/12/11
Multifamily – Non-Agency	+250-300	+225-300	+225-300	+225-300	+225-325
Multifamily- Agency	+300	+250-300	+250-300	+250-300	+250-310
Regional Mall	+275-300	+250-275	+225-275	+225-300	+225-300
Grocery Anchored	+275-300	+250-300	+225-275	+225-300	+225-300
Multi-Tenant Industrial	+250-350	+250-300	+250-350	+250-350	+250-350
CBD Office	+225-300	+250-300	+225-300	+225-300	+225-300
Suburban Office	+250-350	+275-350	+275-350	+275-350	+275-350
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%	0.26%	0.26%	0.24%	0.22%
3-Month LIBOR	0.30%	0.31%	0.31%	0.30%	0.28%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +6.00%
S & P 500⁽²⁾:+4.93%
NASDAQ⁽³⁾: +4.21%
Russell 2000 ⁽⁴⁾:+6.57%
MSCI U.S. REIT ⁽⁵⁾:+6.38%
_____
^{(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	4/16/2011
3-Month	0.12%	0.06%
6-Month	0.18%	0.11%
2 Year	0.59%	0.69%
5 Year	2.01%	2.12%
10 Year	3.29%	3.41%

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Stephen Blank

Stephen R. Blank joined ULI in December 1998 as Senior Fellow, Finance. His primary responsibilities include: expanding ULI’s real estate capital markets information and education programs; authoring real estate capital market commentary; participating as a principal researcher and adviser for the Emerging Trends in Real Estate series of publications; organizing and participating in real estate capital markets programs at ULI events worldwide; and participating in industry meetings, seminars, and conferences. Prior to joining ULI, Blank served from December 1993 to November 1998 as Managing Director, Real Estate Investment Banking of Oppenheimer & Co., Inc. His responsibilities included: structuring, underwriting, and executing corporate financings including initial public offerings of common and preferred shares, unsecured debentures, and convertible bonds; property acquisitions, dispositions, and financing; and financial advisory services including mergers and acquisitions, corporate restructurings, and recapitalizations.