Monday’s Numbers: January 24, 2010

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged. Wait another two weeks and we’ll see how things shape up after the first round of 2011 deals are committed. Read about snapshot deals reflecting today’s capital markets.

January 24, 2011

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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.

“Banyan Tree Closes $214 Million Hospitality Fund;” “UBS Raises Additional Capital for Core-Oriented Fund;” and “AXA Real Estate Holds First Closes for European Debt Fund” -- all good indicators of the capital markets today.

Comment: Healthy sign---velocity of institutional fundraising increasing.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged. Wait another two weeks and we’ll see how things shape up after the first round of 2011 deals are committed.

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	1/7/11	1/14/11
Office	342	214	200	202
Retail	326	207	193	192
Multifamily	318	188	176	177
Industrial	333	201	188	187

Average Asking Spread	330	203	189	189

10-Year Treasury	3.83%	3.29%	3.38%	3.40%
Source: Commercial Mortgage Alert; Trepp.

The Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) was unchanged for the reporting period.

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
Multifamily - Non-Agency	+270	+250	+250
Multifamily – Agency	+280	+260	+260
Regional Mall	+280	+260	+260
Strip/Power Center	+280	+265	+265
Multi-Tenant Industrial	+270	+270	+270
CBD Office	+280	+270	+260
Suburban Office	+300	+300	+270
Full-Service Hotel	+320	+320	+300
Limited-Service Hotel	+400	+375	+350
5-Year Treasury	2.60%	2.07%	2.05%
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
Multifamily - Non-Agency	+190	+190	+190
Multifamily – Agency	+200	+195	+195
Regional Mall	+175	+180	+180
Strip/Power Center	+190	+185	+185
Multi-Tenant Industrial	+190	+190	+190
CBD Office	+180	+180	+180
Suburban Office	+190	+190	+190
Full-Service Hotel	+290	+270	+250
Limited-Service Hotel	+330	+310	+280
10-Year Treasury	3.47%	3.38%	3.45%
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
Multifamily – Non-Agency	+250-300	+225-300	+225-300
Multifamily- Agency	+300	+275-300	+250-300
Regional Mall	+275-300	+250-275	+250-275
Strip/Power Center	+275-300	+275-300	+275-300
Multi-Tenant Industrial	+250-350	+250-350	+250-350
CBD Office	+225-300	+225-300	+250-300
Suburban Office	+250-350	+250-300	+275-350
Full-Service Hotel	+300-450	+350-450	+350-450
Limited-Service Hotel	+450-600	+400-500	+400-500
1-Month LIBOR	0.26%	0.26%	0.26%
3-Month LIBOR	0.30%	0.30%	0.30%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +2.55%
S & P 500⁽²⁾:+1.96%
NASDAQ⁽³⁾: +1.30%
Russell 2000 ⁽⁴⁾: -2.04%
MSCI U.S. REIT ⁽⁵⁾:-0019%

^{(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	1/8/11	1/15/11	1/22/11
3-Month	0.12%	0.13%	0.15%	0.15%
6-Month	0.18%	0.17%	0.17%	0.18%
2 Year	0.59%	0.59%	0.57%	0.61%
5 Year	2.01%	1.96%	1.92%	2.00%
10 Year	3.29%	3.32%	3.32%	3.40%
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.