Headlines
“Chinese Property Investor Led Recap of Manhattan Office [Property]”
Mr. Disney was correct—it’s a small world after all, made smaller by the recapitalization of 1180 Avenue of the Americas, an approximately 384,000 square foot office building located in New York, by HNA Property Holding Group of China which acquired a 90 percent interest in the property for $83 million.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained static, with all-in costs remaining in the 5.00+/- percent range. Our sense is that rates will be “range bound” for the foreseeable future, subject to a “Black Swan” event, like the U.S. Government defaulting on its sovereign debt.
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 | 5/27/11 | |
Office | 342 | 214 | 176 |
Retail | 326 | 207 | 170 |
Multifamily | 318 | 188 | 156 |
Industrial | 333 | 201 | 167 |
Average Asking Spread | 330 | 203 | 167 |
10-Year Treasury | 3.83% | 3.29% | 3.07% |
The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended June 2 showed floating rate spreads narrowing maybe 5 basis points with fixed rate spreads basically unchanged. Clearly, 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 | 4/28/11 | 5/12/11 | 6/2/11 | |
Multifamily - Non-Agency | +270 | +245 | +230 | +225 | +225 |
Multifamily – Agency | +280 | +250 | +205 | +200 | +200 |
Regional Mall | +280 | +260 | +260 | +255 | +255 |
Grocery Anchored | +280 | +260 | +245 | +245 | +245 |
Strip and Power Centers |
|
|
| +265 | +265 |
Multi-Tenant Industrial | +270 | +265 | +245 | +245 | +245 |
CBD Office | +280 | +260 | +250 | +250 | +250 |
Suburban Office | +300 | +270 | +260 | +260 | +260 |
Full-Service Hotel | +320 | +300 | +280 | +275 | +265 |
Limited-Service Hotel | +400 | +325 | +320 | +320 | +300 |
5-Year Treasury | 2.60% | 2.23% | 2.05% | 1.88% | 1.62% |
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 | 4/12/11 | 5/12/11 | 6/2/11 | |
Multifamily - Non-Agency | +190 | +180 | +180 | +180 | +180 |
Multifamily – Agency | +200 | +185 | +185 | +175 | +170 |
Regional Mall | +175 | +180 | +180 | +180 | +180 |
Grocery Anchor | +190 | +185 | +181 | +175 | +175 |
Strip and Power Centers |
|
|
| +190 | +190 |
Multi-Tenant Industrial | +190 | +190 | +190 | +185 | +185 |
CBD Office | +180 | +180 | +180 | +180 | +180 |
Suburban Office | +190 | +190 | +190 | +190 | +190 |
Full-Service Hotel | +290 | +230 | +230 | +220 | +220 |
Limited-Service Hotel | +330 | +260 | +240 | +240 | +240 |
10-Year Treasury | 3.47% | 3.45% | 3.51% | 3.22% | 2.99% |
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 | 4/12/11 | 4/28/11 | 5/12/11 | 6/2/11 | |
Multifamily – Non-Agency | +250-300 | +225-325 | +225-315 | +205-300 | +200-275 |
Multifamily- Agency | +300 | +250-310 | +250-310 | +225-310 | +220-270 |
Regional Mall | +275-300 | +225-300 | +225-300 | +200-275 | +205-275 |
Grocery Anchored | +275-300 | +225-300 | +225-300 | +210-285 | +215-285 |
Strip and Power Centers |
|
|
| +230-300 | +235-300 |
Multi-Tenant Industrial | +250-350 | +250-350 | +250-350 | +235-325 | +230-325 |
CBD Office | +225-300 | +225-300 | +225-300 | +225-300 | +215-300 |
Suburban Office | +250-350 | +275-350 | +250-350 | +250-350 | +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% | 0.21% | 0.20% | 0.19% |
3-Month LIBOR | 0.30% | 0.28% | 0.27% | 0.26% | 0.25% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +4.96%
S & P 500 (2):+3.38%
NASDAQ (3): +3.01%
Russell 2000 (4):+3.12%
MSCI U.S. REIT (5):+8.95%
(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 | 5/27/2011 | |
3-Month | 0.12% | 0.04% |
6-Month | 0.18% | 0.10% |
2 Year | 0.59% | 0.48% |
5 Year | 2.01% | 1.72% |
10 Year | 3.29% | 3.07% |