The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders was 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 4.80 percent.
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 | 10/22 | 10/29 | 11/5 | 11/12 | 11/26 | |
Office | 342 | 244 | 253 | 228 | 221 | 222 |
Retail | 326 | 230 | 234 | 213 | 209 | 208 |
Multifamily | 318 | 212 | 205 | 198 | 195 | 195 |
Industrial | 333 | 229 | 226 | 211 | 206 | 208 |
Average Asking Spread | 330 | 229 | 230 | 213 | 208 | 208 |
10-Year Treasury | 3.83% | 2.60% | 2.53% | 2.53% | 2.79% | 2.72% |
Source: Commercial Mortgage Alert; Trepp. |
Changes in spreads in the December 3rd 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): +10.20%
S & P 500 (2):+9.83%
NASDAQ (3): +14.20%
Russell 2000 (4): +19.30%
MSCI U.S. REIT (5):+21.42%
(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 | 12/4/10 | |
3-Month | .016% | 0.15% | 0.15% | 0.14% |
6-Month | 0.25% | 0.23% | 0.19% | 0.19% |
2 Year | 0.99% | 1.06% | 0.41% | 0.48% |
5 Year | 2.60% | 2.62% | 1.26% | 1.62% |
10 Year | 3.85% | 3.88% | 2.51% | 3.01% |
Source: Bloomberg LLP. |