Headlines
The following headline conveys a sense of the terms and conditions present in the real estate capital markets: ING Group Sells ING Real Estate Investment Management.
Comment: The unspoken question: who, if anyone, is next? Is this the start to a wave of merger and acquisitions and/or consolidations among institutional real estate investment managers? Maybe it’s cheaper to buy than to build.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders came in a “few” basis points (0.09%); financing appears available at attractive rates.
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 | 1/28/2011 | 2/7/2011 | 2/14/2011 | |
Office | 342 | 214 | 202 | 202 | 199 | 189 |
Retail | 326 | 207 | 192 | 191 | 188 | 181 |
Multifamily | 318 | 188 | 177 | 174 | 173 | 162 |
Industrial | 333 | 201 | 187 | 186 | 184 | 178 |
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Average Asking Spread | 330 | 203 | 189 | 188 | 186 | 178 |
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10-Year Treasury | 3.83% | 3.29% | 3.40% | 3.50% | 3.64% | 3.63% |
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 | 2/15/11 | |
Multifamily - Non-Agency | +270 | +250 | +250 | +250 | +250 |
Multifamily – Agency | +280 | +260 | +260 | +255 | +255 |
Regional Mall | +280 | +260 | +260 | +260 | +260 |
Grocery Anchored | +280 | +265 | +265 | +265 | +260 |
Multi-Tenant Industrial | +270 | +270 | +270 | +270 | +270 |
CBD Office | +280 | +270 | +260 | +260 | +260 |
Suburban Office | +300 | +300 | +270 | +270 | +270 |
Full-Service Hotel | +320 | +320 | +300 | +300 | +300 |
Limited-Service Hotel | +400 | +375 | +350 | +330 | +330 |
5-Year Treasury | 2.60% | 2.07% | 2.05% | 2.06% | 2.36% |
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 | 2/15/11 | |
Multifamily - Non-Agency | +190 | +190 | +190 | +190 | +180 |
Multifamily – Agency | +200 | +195 | +195 | +200 | +190 |
Regional Mall | +175 | +180 | +180 | +180 | +180 |
Grocery Anchor | +190 | +185 | +185 | +185 | +185 |
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 | +270 | +250 | +250 | +240 |
Limited-Service Hotel | +330 | +310 | +280 | +260 | +260 |
10-Year Treasury | 3.47% | 3.38% | 3.45% | 3.46% | 3.63% |
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 | 2/15/11 | |
Multifamily – Non-Agency | +250-300 | +225-300 | +225-300 | +225-300 | +225-300 |
Multifamily- Agency | +300 | +275-300 | +250-300 | +250-300 | +250-300 |
Regional Mall | +275-300 | +250-275 | +250-275 | +250-275 | +250-275 |
Grocery Anchored | +275-300 | +275-300 | +275-300 | +250-300 | +250-300 |
Multi-Tenant Industrial | +250-350 | +250-350 | +250-350 | +250-350 | +250-300 |
CBD Office | +225-300 | +225-300 | +250-300 | +250-300 | +250-300 |
Suburban Office | +250-350 | +250-300 | +275-350 | +275-350 | +275-350 |
Full-Service Hotel | +300-450 | +350-450 | +350-450 | +350-400 | +350-450 |
Limited-Service Hotel | +450-600 | +400-500 | +400-500 | +400-500 | +400-500 |
1-Month LIBOR | 0.26% | 0.26% | 0.26% | 0.26% | 0.26% |
3-Month LIBOR | 0.30% | 0.30% | 0.30% | 0.31% | 0.31% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +7.04%
S & P 500 (2):+6.70%
NASDAQ (3): +6.74%
Russell 2000 (4):+5.65%
MSCI U.S. REIT (5):+5.20%
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(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 | 2/18/2011 | |
3-Month | 0.12% | 0.15% | 0.11% | 0.09% |
6-Month | 0.18% | 0.17% | 0.15% | 0.14% |
2 Year | 0.59% | 0.74% | 0.83% | 0.75% |
5 Year | 2.01% | 2.26% | 2.36% | 2.27% |
10 Year | 3.29% | 3.64% | 3.63% | 3.58% |
Source: Bloomberg LLP. |