Monday’s Numbers: June 20, 2011

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained relatively unchanged during the most recent survey period. And as we seem to say, all-in costs remain in the 5.00+/- percent range and should be range bound for the foreseeable future, subject to a “Black Swan” event.

Headlines

ULI’s Real Estate Capital Markets Conference, “Real Estate Finance and Investment 2011 – Investing, Accessing, Lending, and Sourcing Capital” is being held on June 22 – 23 in New York (Sheraton New York Hotels & Towers). For additional information, see www.uli.org/capitalmarkets.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained relatively unchanged during the most recent survey period. All-in costs remain in the 5.00+/- percent range and should be range bound for the foreseeable future, subject to a “Black Swan” event.

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

6/10/11

Office

342

214

184

Retail

326

207

175

Multifamily

318

188

162

Industrial

333

201

170

Average Asking Spread

330

203

173

10-Year Treasury

3.83%

3.29%

2.97%

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): +3.69%
S & P 500 (2):+1.10%
NASDAQ (3): -1.37%
Russell 2000 (4):-0.22%
MSCI U.S. REIT (5):+6.27%
_____
(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

6/18/2011

3-Month

0.12%

0.03%

6-Month

0.18%

0.09%

2 Year

0.59%

0.37%

5 Year

2.01%

1.53%

10 Year

3.29%

2.94%

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.
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