Monday’s Numbers: August 6, 2012

The Trepp, LLC survey showed commercial mortgage spreads widening six basis points during the survey period and as much as 15 basis points during the past month as capital continue to remain available from both conventional and securitized lenders for properties that can pass lenders’ stringent underwriting metrics. Floor pricing in the 4 percent to 5 percent range continues to be in effect.

August 6, 2012

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The Trepp, LLC survey showed commercial mortgage spreads widening six basis points during the survey period and as much as 15 basis points during the past month as capital continue to remain available from both conventional as well as securitized lenders for properties which can pass lender’s continuing stringent underwriting metrics. Floor pricing in the 4.0 percent to 5.0 percent range continues in effect.

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	7/27/12	Week Earlier	Month Earlier
Office	342	214	210	244	239	229
Retail	326	207	207	238	232	224
Multifamily	318	188	198	229	223	218
Industrial	333	201	205	234	229	222
Average Spread	330	203	205	236	231	223
10-Year Treasury	3.83%	3.29%	1.88%	1.56%	1.49%	1.75%

The Cushman & Wakefield Equity, Debt, and Structured Finance Commercial Mortgage Spread monthly survey of commercial mortgage spreads showed spreads for 10-year, fixed rate mortgages, coming in 5 basis points, reinforcing our comments above regarding floor pricing by lenders.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	12/31/10	4/27/12	5/30/12	6/28/12	2/26/12
Multifamily - Non-Agency	+270	+240	+250	+245	+245
Multifamily – Agency	+280	+200	+210	+225	+225
Regional Mall	+280	+275	+300	+300	+295
Grocery Anchored	+280	+270	+295	+295	+290
Strip and Power Centers		+295	+320	+320	+315
Multi-Tenant Industrial	+270	+285	+305	+305	+300
CBD Office	+280	+270	+295	+300	+295
Suburban Office	+300	+290	+315	+315	+315
Full-Service Hotel	+320	+340	+360	+360	+360
Limited-Service Hotel	+400	+350	+370	+370	+370
5-Year Treasury	2.60%	0.83%	0.69%	0.69%	0.57%
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	4/27/12	5/30/12	6/28/12	7/26/12
Multifamily - Non-Agency	+190	+210	+220	+220	+220
Multifamily – Agency	+200	+170	+190	+200	+210
Regional Mall	+175	+220	+245	+245	+235
Grocery Anchor	+190	+200	+230	+235	+230
Strip and Power Centers		+235	+260	+255	+250
Multi-Tenant Industrial	+190	+240	+260	+260	+255
CBD Office	+180	+220	+250	+250	+245
Suburban Office	+190	+245	+270	+265	+265
Full-Service Hotel	+290	+260	+295	+290	+290
Limited-Service Hotel	+330	+290	+320	+310	+310
10-Year Treasury	3.47%	1.95%	1.62%	1.58%	1.42%
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	4/27/12	5/30/12	6/28/12	7/26/12
Multifamily – Non-Agency	+250-300	+200-250	+200-250	+200-260	+200-260
Multifamily- Agency	+300	+220-265	+220-265	+220-265	+220-265
Regional Mall	+275-300	+200-265	+210-275	+210-275	+210-275
Grocery Anchored	+275-300	+200-275	+205-275	+210-275	+210-275
Strip and Power Centers		+225-300	+225-300	+225-300	+225-300
Multi-Tenant Industrial	+250-350	+225-305	+235-305	+235-305	+230-305
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	+250-400	+275-400	+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%	0.46%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Equity, Debt, and Structured Finance.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +7.19%
S & P 500^(2):+10.61%
NASDAQ⁽³⁾: +13.92%
Russell 2000 ⁽⁴⁾:+6.42%
Morgan Stanley U.S. REIT ⁽⁵⁾:+15.54%

^{(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	8/4/12
3-Month	0.12%	0.01%	0.08%
6-Month	0.18%	0.06%	0.13%
2 Year	0.59%	0.24%	0.24%
5 Year	2.01%	0.83%	0.66%
7 Year			1.06%
10 Year	3.29%	1.88%	1.56%

Key Rates (in Percentages)
	Current	1 Mo. Prior	3 Mo. Prior	6 Mo. Prior	1 Yr. Prior
Fed Funds Rate	0.15	0.18	0.16	0.11	0.13
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	8.30	8.20	8.10	8.30	9.10
1-Month Libor	0.24	0.25	0.24	0.27	0.21
3-Month Libor	0.44	0.46	0.47	0.53	0.27

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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.