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. |