Headlines
Headlines are normally self-explanatory; we hope the ones we publish will convey a sense of the terms and conditions present in the real estate capital markets.
“AFIRE (the Association of Foreign Investors in Real Estate) Members Survey Shows 60 Percent Believed the U.S. Commercial real Estate Market Offered the Best Potential for Capital Appreciation Since 2000”
Comment: AFIRE members own in excess of $625 billion of global real estate; 72 percent reported they expect to invest more money in real estate in 2011 than 2010; in 2006, just 23 percent of that year’s survey respondents rated investment in the U.S. as highly as projected in 2011 .
“Commercial real Estate Firms Set to Increase Staffing in 2011”
Comment: Finally!
“Equity REITs Begin 2011 with +4.12 percent Return in January”
Comment: And the average dividend is 3.43 percent.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained basically unchanged with an all-in cost of 5.50% remaining very attractive.
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 | 1/14/11 | 1/21/11 | 1/28/2011 | 2/7/2011 | |
Office | 342 | 214 | 202 | 204 | 202 | 199 |
Retail | 326 | 207 | 192 | 194 | 191 | 188 |
Multifamily | 318 | 188 | 177 | 178 | 174 | 173 |
Industrial | 333 | 201 | 187 | 188 | 186 | 184 |
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Average Asking Spread | 330 | 203 | 189 | 191 | 188 | 186 |
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10-Year Treasury | 3.83% | 3.29% | 3.40% | 3.45% | 3.50% | 3.64% |
Source: Commercial Mortgage Alert; Trepp. | ||||||
Commentary regarding the Cushman & Wakefield Sonnenblick-Goldman Survey showed little, if any, change over the past two weeks as all-in costs remain “acceptable” to lender and borrower alike.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages | ||||
12/16/10 | 1/6/11 | 1/20/11 | 2/3/11 | ||
Multifamily - Non-Agency | +270 | +250 | +250 | +250 | |
Multifamily – Agency | +280 | +260 | +260 | +255 | |
Regional Mall | +280 | +260 | +260 | -260 | |
Strip/Power Center | +280 | +265 | +265 | +265 | |
Multi-Tenant Industrial | +270 | +270 | +270 | +270 | |
CBD Office | +280 | +270 | +260 | +260 | |
Suburban Office | +300 | +300 | +270 | +270 | |
Full-Service Hotel | +320 | +320 | +300 | +300 | |
Limited-Service Hotel | +400 | +375 | +350 | +330 | |
5-Year Treasury | 2.60% | 2.07% | 2.05% | 2.06% | |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages | ||||
12/1610 | 1/6/11 | 1/20/11 | 2/3/11 | ||
Multifamily - Non-Agency | +190 | +190 | +190 | +190 | |
Multifamily – Agency | +200 | +195 | +195 | +200 | |
Regional Mall | +175 | +180 | +180 | +180 | |
Strip/Power Center | +190 | +185 | +185 | +185 | |
Multi-Tenant Industrial | +190 | +190 | +190 | +190 | |
CBD Office | +180 | +180 | +180 | +180 | |
Suburban Office | +190 | +190 | +190 | +190 | |
Full-Service Hotel | +290 | +270 | +250 | +250 | |
Limited-Service Hotel | +330 | +310 | +280 | +260 | |
10-Year Treasury | 3.47% | 3.38% | 3.45% | 3.46% | |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages | ||||
12/1610 | 1/6/11 | 1/20/11 | 2/3/11 | ||
Multifamily – Non-Agency | +250-300 | +225-300 | +225-300 | +225-300 | |
Multifamily- Agency | +300 | +275-300 | +250-300 | +250-300 | |
Regional Mall | +275-300 | +250-275 | +250-275 | +250-275 | |
Strip/Power Center | +275-300 | +275-300 | +275-300 | +250-300 | |
Multi-Tenant Industrial | +250-350 | +250-350 | +250-350 | +250-350 | |
CBD Office | +225-300 | +225-300 | +250-300 | +250-300 | |
Suburban Office | +250-350 | +250-300 | +275-350 | +275-350 | |
Full-Service Hotel | +300-450 | +350-450 | +350-450 | +350-400 | |
Limited-Service Hotel | +450-600 | +400-500 | +400-500 | +400-500 | |
1-Month LIBOR | 0.26% | 0.26% | 0.26% | 0.26% | |
3-Month LIBOR | 0.30% | 0.30% | 0.30% |
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* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +6.02%
S & P 500 (2):+5.60%
NASDAQ (3): +5.82%
Russell 2000 (4):+2.36%
MSCI U.S. REIT (5):+4.85%
(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 | 2/5/2011 | 2/12/2011 |
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3-Month | 0.12% | 0.15% | 0.11% |
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6-Month | 0.18% | 0.17% | 0.15% |
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2 Year | 0.59% | 0.74% | 0.83% |
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5 Year | 2.01% | 2.26% | 2.36% |
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10 Year | 3.29% | 3.64% | 3.63% |
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Source: Bloomberg LLP. | ||||
