Monday’s Numbers: June 11, 2012

The Trepp LLC survey showed spreads widening 10 to 15 basis point solely in reaction to Treasury yields dropping, then regaining a little luster. With the 10-year Treasury trading at 1.64 percent (as of June 9) and spreads averaging 228 basis points, all-in cost remains in the very attractive 4.00 percent range, subject to floor pricing by most lenders.

June 11, 2012

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The Trepp LLC survey showed spreads widening 10 to 15 basis point solely in reaction to Treasury yields dropping, then regaining a little luster. With the 10-year Treasury trading at 1.64 percent (as of June 9) and spreads averaging 228 basis points, all-in cost remains in the very attractive 4.00 percent range, subject to floor pricing by most lenders.

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	12/31/11	6/1/12	Month Earlier
Office	342	214	210	233	219
Retail	326	207	207	230	209
Multifamily	318	188	198	222	201
Industrial	333	201	205	226	209
Average Spread	330	203	205	228	195
10-Year Treasury	3.83%	3.29%	1.88%	1.72%	1.95%

The Cushman & Wakefield Sonnenblick-Goldman Commercial Mortgage Spread survey showed spreads for 10-year fixed rate mortgages widening 20 to 25 basis points during the survey period.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	12/31/10	2/28/12	3/28/12	4/27/12	5/30/12
Multifamily - Non-Agency	+270	+240	+230	+240	+250
Multifamily – Agency	+280	+210	+195	+200	+210
Regional Mall	+280	+300	+275	+275	+300
Grocery Anchored	+280	+290	+270	+270	+295
Strip and Power Centers		+315	+295	+295	+320
Multi-Tenant Industrial	+270	+310	+310	+285	+305
CBD Office	+280	+310	+295	+270	+295
Suburban Office	+300	+320	+310	+290	+315
Full-Service Hotel	+320	+350	+350	+340	+360
Limited-Service Hotel	+400	+360	+360	+350	+370
5-Year Treasury	2.60%	0.78%	0.83%	0.83%	0.69%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages
	12/31/10	2/28/12	3/28/12	4/27/12	5/30/12
Multifamily - Non-Agency	+190	+210	+200	+210	+220
Multifamily – Agency	+200	+180	+165	+170	+190
Regional Mall	+175	+235	+275	+220	+245
Grocery Anchor	+190	+230	+270	+200	+230
Strip and Power Centers		+250	+290	+235	+260
Multi-Tenant Industrial	+190	+250	+280	+240	+260
CBD Office	+180	+320	+270	+220	+250
Suburban Office	+190	+250	+290	+245	+270
Full-Service Hotel	+290	+290	+325	+260	+295
Limited-Service Hotel	+330	+315	+345	+290	+320
10-Year Treasury	3.47%	1.90%	2.21%	1.95%	1.62%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	12/31/10	2/28/12	3/28/12	4/27/12	5/30/12
Multifamily – Non-Agency	+250-300	+200-250	+200-250	+200-250	+200-250
Multifamily- Agency	+300	+220-265	+220-265	+220-265	+220-265
Regional Mall	+275-300	+200-265	+200-265	+200-265	+210-275
Grocery Anchored	+275-300	+200-275	+200-275	+200-275	+205-275
Strip and Power Centers		+225-300	+225-300	+225-300	+225-300
Multi-Tenant Industrial	+250-350	+225-305	+225-305	+225-305	+235-305
CBD Office	+225-300	+225-300	+225-300	+225-300	+225-300
Suburban Office	+250-350	+250-325	+250-325	+250-325	+250-325
Full-Service Hotel	+300-450	+275-400	+275-400	+250-400	+275-400
Limited-Service Hotel	+450-600	+350-550	+325-450	+325-450	+325-450
1-Month LIBOR	0.26%	0.24%	0.24%	0.24%	0.24%
3-Month LIBOR	0.30%	0.49%	0.47%	0.47%	0.47%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +2.76%
S & P 500^(2):+5.41%
NASDAQ⁽³⁾: +9.72%
Russell 2000 ⁽⁴⁾:3.82%
Morgan Stanley U.S. REIT ⁽⁵⁾:+9.13%

^{(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	6/9/2012
3-Month	0.12%	0.01%	0.08%
6-Month	0.18%	0.06%	0.13%
2 Year	0.59%	0.24%	0.27%
5 Year	2.01%	0.83%	0.71%
7 Year			1.09%
10 Year	3.29%	1.88%	1.64%

Key Rates (in Percentages)
	Current	1 Mo. Prior	3 Mo. Prior	6 Mo. Prior	1 Yr. Prior
Fed Funds Rate	0.17	0.16	0.12	0.08	.011
Federal Reserve Target Rate	0.25	0.25	0.25	0.25	0.25
Prime Rate	3.25	3.25	3.25	3.25	3.25
US Unemployment Rate	8.20	8.10	8.30	8.70	9.00
1-Month Libor	0.24	0.24	0.24	0.27	0.19
3-Month Libor	0.47	0.47	0.48	0.53	0.25

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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.