Headlines
“You Can Take Interest Rates Out of the Equation for a While…a Long While”
Based on the Federal Reserve’s pronouncement this week that it would be keeping short-term interest rates at the current historical low through 2014, we should expect rates to remain at today’s levels for the next three years, baring a global financial crises. Imagine that: pro-forma financing statements with an imputed borrowing cost of five percent or even less.
Monday’s Numbers
During the survey period, the Trepp LLC survey remained at current levels, unchanged by a little as a basis point; we suspect the markets’ are holding their collective breaths, waiting for this week’s installment of Greece’s financial saga.
Asking Spreads over U.S. Treasury Bonds in Basis Points | |||||
12/31/09 | 12/31/10 | 12/31/11 | 1/20/12 | Month Earlier | |
Office | 342 | 214 | 210 | 215 | 210 |
Retail | 326 | 207 | 207 | 211 | 207 |
Multifamily | 318 | 188 | 198 | 206 | 198 |
Industrial | 333 | 201 | 205 | 207 | 205 |
Average Spread | 330 | 203 | 205 | 210 | 205 |
10-Year Treasury | 3.83% | 3.29% | 1.88% | 2.02 | 2.05 |
The Cushman & Wakefield Sonnenblick-Goldman Survey shows rates unchanged to down five basis points. Lenders seem to be going about their business, reacting to market events as necessary.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
12/31/10 | 1/5/12 | 1/26/12 | |||
Multifamily - Non-Agency | +270 | +245 | +240 | ||
Multifamily – Agency | +280 | +255 | +245 | ||
Regional Mall | +280 | +300 | +300 | ||
Grocery Anchored | +280 | +295 | +295 | ||
Strip and Power Centers |
| +320 | +320 | ||
Multi-Tenant Industrial | +270 | +305 | +310 | ||
CBD Office | +280 | +310 | +310 | ||
Suburban Office | +300 | +320 | +320 | ||
Full-Service Hotel | +320 | +350 | +350 | ||
Limited-Service Hotel | +400 | +360 | +360 | ||
5-Year Treasury | 2.60% | 0.89% | 0.78% | ||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
12/31/10 | 1/5/12 | 1/26/12 | |||
Multifamily - Non-Agency | +190 | +205 | +210 | ||
Multifamily – Agency | +200 | +200 | +205 | ||
Regional Mall | +175 | +245 | +245 | ||
Grocery Anchor | +190 | +240 | +240 | ||
Strip and Power Centers |
| +255 | +255 | ||
Multi-Tenant Industrial | +190 | +245 | +255 | ||
CBD Office | +180 | +250 | +240 | ||
Suburban Office | +190 | +265 | +260 | ||
Full-Service Hotel | +290 | +300 | +290 | ||
Limited-Service Hotel | +330 | +310 | +315 | ||
10-Year Treasury | 3.47% | 2.00% | 1.97% | ||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage | ||||
12/31/10 | 1/5/12 | 1/26/12 | |||
Multifamily – Non-Agency | +250-300 | +200-250 | +200-250 | ||
Multifamily- Agency | +300 | +220-265 | +220-265 | ||
Regional Mall | +275-300 | +250-350 | +210-265 | ||
Grocery Anchored | +275-300 | +240-325 | +200-275 | ||
Strip and Power Centers |
| +250-350 | +225-300 | ||
Multi-Tenant Industrial | +250-350 | +270-350 | +225-305 | ||
CBD Office | +225-300 | +275-350 | +225-300 | ||
Suburban Office | +250-350 | +300-350 | +250-325 | ||
Full-Service Hotel | +300-450 | +375-475 | +350-425 | ||
Limited-Service Hotel | +450-600 | +375-550 | +400-500 | ||
1-Month LIBOR | 0.26% | 0.30% | 0.27% | ||
3-Month LIBOR | 0.30% | 0.58% | 0.55% | ||
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +3.63%
S & P 500 (2): +4.67%
NASDAQ (3): +8.11%
Russell 2000 (4):+7.77%
Morgan Stanley U.S. REIT (5):+6.72%
_____
(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 | 12/31/11 | 1/29/12 | |
3-Month | 0.12% | 0.01% | .05% |
6-Month | 0.18% | 0.06% | .07% |
2 Year | 0.59% | 0.24% | .21% |
5 Year | 2.01% | 0.83% | .74% |
10 Year | 3.29% | 1.88% | 1.89% |
