Monday’s Numbers: December 13, 2010

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders came in slightly during the most recent survey period. During the period, 10-year Treasury bond yields were unchanged. There seems to be an all-in cost of 5.0% “glass ceiling” in place. For the survey period, average all-in cost equaled 5.02%, the “present” glass ceiling. Not much is expected to happen during the next two weeks so we’ll sit on the sidelines and wait for January’s allocation to re-fill lender’s coffers.

December 13, 2010

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The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders came in slightly during the most recent survey period. During the period, 10-year Treasury bond yields were unchanged. There seems to be an all-in cost of 5.0% “glass ceiling” in place. For the survey period, average all-in cost equaled 5.02%, the “present” glass ceiling. Not much is expected to happen during the next two weeks so we’ll sit on the sidelines and wait for January’s allocation to re-fill lender’s coffers.

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	10/29	11/5	11/12	11/26	12/3
Office	342	253	228	221	222	220
Retail	326	234	213	209	208	206
Multifamily	318	205	198	195	195	192
Industrial	333	226	211	206	208	202

Average Asking Spread	330	230	213	208	208	205

10-Year Treasury	3.83%	2.53%	2.53%	2.79%	2.72%	2.72%
Source: Commercial Mortgage Alert; Trepp.

Changes in spreads in the December 3^rd Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) were basically nil, continuing to support our 10-year term, 5.0 percent, glass ceiling thesis.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	1/6/10	10/13/10	10/27/10	11/11/10	12/3/10
Multifamily - Non-Agency	+360	+280	+280	+280	+280
Multifamily – Agency	+220	+240	+250	+280	+280
Regional Mall	+450	+280	+290	+305	+290
Strip/Power Center	+460	+285	+295	+280	+300
Multi-Tenant Industrial	+435	+275	+275	+280	+280
CBD Office	+435	+270	+270	+280	+280
Suburban Office	+465	+300	+300	+300	+300
Full-Service Hotel	+500	+375	+375	+350	+350
Limited-Service Hotel	+500	+450	+450	+425	+380
5-Year Treasury	2.60%	1.17%	1.14%	1.11%	1.66%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages
	1/6/10	10/13/10	10/27/10	11/11/10	12/3/10
Multifamily - Non-Agency	+300	+180	+180	+180	+190
Multifamily – Agency	+220	+190	+190	+190	+200
Regional Mall	+350	+200	+200	+215	+175
Strip/Power Center	+350	+200	+205	+220	+190
Multi-Tenant Industrial	+420	+190	+190	+190	+190
CBD Office	+330	+190	+190	+190	+190
Suburban Office	+355	+220	+220	+200	+190
Full-Service Hotel	+550	+340	+340	+335	+300
Limited-Service Hotel	+575	+380	+380	+350	+350
10-Year Treasury	3.85%	2.45%	2.71%	2.72%	2.98%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	1/6/10	10/13/10	10/27/10	11/11/10	12/3/10
Multifamily – Non-Agency	+300 – 400	+250-300	+275-325	+250-300	+250-300
Multifamily- Agency	NA	NA	NA	+300	+300
Regional Mall	+475 – 600	+275-350	+275-350	+275-350	+275-325
Strip/Power Center	+450 – 650	+275-350	+275-350	+275-350	+275-325
Multi-Tenant Industrial	+400 – 500	+250-350	+250-350	+250-350	+250-350
CBD Office	+425	+225-300	+225-300	+225-300	+225-300
Suburban Office	+425	+250-350	+250-350	+250-350	+250-350
Full-Service Hotel	+600	+375-500	+375-500	+375-500	+300-450
Limited-Service Hotel	+750	+450-600	+450-600	+450-600	+450-600
1-Month LIBOR	0.23%	0.26%	0.26%	0.25%	0.26%
3-Month LIBOR	0.25%	0.29%	0.29%	0.29%	0.30%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +9.42%
S & P 500⁽²⁾:+11.24%
NASDAQ⁽³⁾: +16.23%
Russell 2000 ⁽⁴⁾: +22.51%
MSCI U.S. REIT ⁽⁵⁾:+19.98%

^{(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
	1/6/10	4/9/10	9/30/10	12/12/10
3-Month	.016%	0.15%	0.15%	0.12%
6-Month	0.25%	0.23%	0.19%	0.18%
2 Year	0.99%	1.06%	0.41%	0.62%
5 Year	2.60%	2.62%	1.26%	1.96%
10 Year	3.85%	3.88%	2.51%	3.30%
Source: Bloomberg LLP.

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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.