Headlines
Headlines are normally self-explanatory; we hope the ones we publish will convey a sense of the terms and conditions present in the real estate capital markets.
“Real Estate Industry Sets Clocks Forward 24 Hours!”
Comment: No comment required.
“Fund Acquires Office Complex, Assumes Modified Commercial Mortgage-Backed Securities Loan”
Comment: This is the first time we’ve seen a CMBS loan modified (in this case, the term was extended). What this tells us is that servicers appear willing to work with credible buyers to make deals work, including modifying loan terms, thereby improving the prospects for deals getting done.
Monday’s Numbers
The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders narrowed slightly week-over-week with financing available at attractive rates (5.25%+/-).
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 | 2/14/2011 | 2/21/2011 | 2/28/2011 | 3/5/2011 | |
Office | 342 | 214 | 189 | 191 | 188 | 183 |
Retail | 326 | 207 | 181 | 179 | 177 | 175 |
Multifamily | 318 | 188 | 162 | 163 | 159 | 159 |
Industrial | 333 | 201 | 178 | 175 | 173 | 171 |
Average Asking Spread | 330 | 203 | 178 | 177 | 174 | 172 |
10-Year Treasury | 3.83% | 3.29% | 3.63% | 3.58% | 3.48% | 3.49% |
Source: Commercial Mortgage Alert; Trepp. | ||||||
The Cushman & Wakefield Sonnenblick-Goldman Survey came in slightly over the past two weeks; we expect rates to remain at these levels baring a “shock” to the system for the foreseeable future.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages | ||||
12/16/10 | 1/20/11 | 2/3/11 | 2/15/11 | 3/2/11 | |
Multifamily - Non-Agency | +270 | +250 | +250 | +250 | +245 |
Multifamily – Agency | +280 | +260 | +255 | +255 | +250 |
Regional Mall | +280 | +260 | +260 | +260 | +260 |
Grocery Anchored | +280 | +265 | +265 | +260 | +260 |
Multi-Tenant Industrial | +270 | +270 | +270 | +270 | +265 |
CBD Office | +280 | +260 | +260 | +260 | +260 |
Suburban Office | +300 | +270 | +270 | +270 | +270 |
Full-Service Hotel | +320 | +300 | +300 | +300 | +300 |
Limited-Service Hotel | +400 | +350 | +330 | +330 | +325 |
5-Year Treasury | 2.60% | 2.05% | 2.06% | 2.36% | 2.17% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages | ||||
12/1610 | 1/20/11 | 2/3/11 | 2/15/11 | 3/2/11 | |
Multifamily - Non-Agency | +190 | +190 | +190 | +180 | +180 |
Multifamily – Agency | +200 | +195 | +200 | +190 | +185 |
Regional Mall | +175 | +180 | +180 | +180 | +180 |
Grocery Anchor | +190 | +185 | +185 | +185 | +185 |
Multi-Tenant Industrial | +190 | +190 | +190 | +190 | +190 |
CBD Office | +180 | +180 | +180 | +180 | +180 |
Suburban Office | +190 | +190 | +190 | +190 | +190 |
Full-Service Hotel | +290 | +250 | +250 | +240 | +230 |
Limited-Service Hotel | +330 | +280 | +260 | +260 | +260 |
10-Year Treasury | 3.47% | 3.45% | 3.46% | 3.63% | 3.47% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages | ||||
12/1610 | 1/20/11 | 2/3/11 | 2/15/11 | 3/2/11 | |
Multifamily – Non-Agency | +250-300 | +225-300 | +225-300 | +225-300 | +225-300 |
Multifamily- Agency | +300 | +250-300 | +250-300 | +250-300 | +250-300 |
Regional Mall | +275-300 | +250-275 | +250-275 | +250-275 | +225-275 |
Grocery Anchored | +275-300 | +275-300 | +250-300 | +250-300 | +225-275 |
Multi-Tenant Industrial | +250-350 | +250-350 | +250-350 | +250-300 | +250-350 |
CBD Office | +225-300 | +250-300 | +250-300 | +250-300 | +225-300 |
Suburban Office | +250-350 | +275-350 | +275-350 | +275-350 | +275-350 |
Full-Service Hotel | +300-450 | +350-450 | +350-400 | +350-450 | +350-450 |
Limited-Service Hotel | +450-600 | +400-500 | +400-500 | +400-500 | +400-500 |
1-Month LIBOR | 0.26% | 0.26% | 0.26% | 0.26% | 0.26% |
3-Month LIBOR | 0.30% | 0.30% | 0.31% | 0.31% | 0.31% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +4.04%
S & P 500 (2):+3.62%
NASDAQ (3): +2.29%
Russell 2000 (4):+1.69%
MSCI U.S. REIT (5):+3.46%
(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 | 2/26/2011 | 3/4/2011 | 3/12/2011 | |
3-Month | 0.12% | 0.12% | 0.11% | 0.07% |
6-Month | 0.18% | 0.15% | 0.15% | 0.13% |
2 Year | 0.59% | 0.71% | 0.68% | 0.64% |
5 Year | 2.01% | 2.16% | 2.18% | 2.06% |
10 Year | 3.29% | 3.48% | 3.49% | 3.40% |
Source: Bloomberg LLP. | ||||
