Headlines
Happy July 4th!
“Nearly Half of Commercial Mortgages that Mature in 2011 are Underwater”
According to Trepp LLC, approximately one-half of the $346 billion of commercial real estate mortgages that will mature this year have outstanding principal balances greater than the value of the property serving as collateral for the mortgage; scary isn’t it!
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders widened a bit (I know, not very precise, but it was only three basis points). Range bound around the 5.00 percent level is not a bad place to be.
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 | 6/24/11 | |
Office | 342 | 214 | 185 |
Retail | 326 | 207 | 178 |
Multifamily | 318 | 188 | 169 |
Industrial | 333 | 201 | 174 |
Average Asking Spread | 330 | 203 | 177 |
10-Year Treasury | 3.83% | 3.29% | 2.86% |
The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended June 16 showed fixed rate spreads widening maybe 10 basis points and floating rate spreads narrowing maybe 5 basis points. So…financing remains available at attractive and affordable rates.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages | ||||
12/16/10 | 3/31/11 | 5/12/11 | 6/2/11 | 6/16/11 | |
Multifamily - Non-Agency | +270 | +245 | +225 | +225 | +230 |
Multifamily – Agency | +280 | +250 | +200 | +200 | +210 |
Regional Mall | +280 | +260 | +255 | +255 | +265 |
Grocery Anchored | +280 | +260 | +245 | +245 | +250 |
Strip and Power Centers |
|
| +265 | +265 | +270 |
Multi-Tenant Industrial | +270 | +265 | +245 | +245 | +255 |
CBD Office | +280 | +260 | +250 | +250 | +255 |
Suburban Office | +300 | +270 | +260 | +260 | +270 |
Full-Service Hotel | +320 | +300 | +275 | +265 | +275 |
Limited-Service Hotel | +400 | +325 | +320 | +300 | +310 |
5-Year Treasury | 2.60% | 2.23% | 1.88% | 1.62% | 1.52% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages | ||||
12/1610 | 3/31/11 | 5/12/11 | 6/2/11 | 6/16/11 | |
Multifamily - Non-Agency | +190 | +180 | +180 | +180 | +185 |
Multifamily – Agency | +200 | +185 | +175 | +170 | +175 |
Regional Mall | +175 | +180 | +180 | +180 | +190 |
Grocery Anchor | +190 | +185 | +175 | +175 | +200 |
Strip and Power Centers |
|
| +190 | +190 | +195 |
Multi-Tenant Industrial | +190 | +190 | +185 | +185 | +190 |
CBD Office | +180 | +180 | +180 | +180 | +190 |
Suburban Office | +190 | +190 | +190 | +190 | +195 |
Full-Service Hotel | +290 | +230 | +220 | +220 | +225 |
Limited-Service Hotel | +330 | +260 | +240 | +240 | +245 |
10-Year Treasury | 3.47% | 3.45% | 3.22% | 2.99% | 2.94% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages | ||||
12/16/10 | 3/31/11 | 5/12/11 | 6/2/11 | 6/16/11 | |
Multifamily – Non-Agency | +250-300 | +225-325 | +205-300 | +200-275 | +200-260 |
Multifamily- Agency | +300 | +250-310 | +225-310 | +220-270 | +220-260 |
Regional Mall | +275-300 | +225-300 | +200-275 | +205-275 | +205-270 |
Grocery Anchored | +275-300 | +225-300 | +210-285 | +215-285 | +205-275 |
Strip and Power Centers |
|
| +230-300 | +235-300 | +225-300 |
Multi-Tenant Industrial | +250-350 | +250-350 | +235-325 | +230-325 | +230-325 |
CBD Office | +225-300 | +225-300 | +225-300 | +215-300 | +215-300 |
Suburban Office | +250-350 | +275-350 | +250-350 | +250-325 | +250-325 |
Full-Service Hotel | +300-450 | +350-450 | +350-450 | +350-450 | +350-450 |
Limited-Service Hotel | +450-600 | +400-500 | +400-500 | +400-500 | +400-500 |
1-Month LIBOR | 0.26% | 0.22% | 0.20% | 0.19% | 0.19% |
3-Month LIBOR | 0.30% | 0.28% | 0.26% | 0.25% | 0.25% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +8.68%
S & P 500 (2):+6.52%
NASDAQ (3): +6.15%
Russell 2000 (4):+7.18%
MSCI U.S. REIT (5):+10.38%
(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 | 7/1/2011 | |
3-Month | 0.12% | 0.02% |
6-Month | 0.18% | 0.10% |
2 Year | 0.59% | 0.47% |
5 Year | 2.01% | 1.78% |
10 Year | 3.29% | 3.18% |
