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.
“J.P. Morgan Chase Prices Commercial Mortgage-Backed Securities Transaction”
J.P. Morgan Chase priced an approximately $1.5 billion commercial mortgage-backed securities offering on March 1st. The offering was comprised of the following property types: 63% retail; 25% office; hotel 6%; manufactured housing 3%; self-storage 2%; industrial 1%; and multifamily (less than 1%).
Take-a-way: the CMBS market continues to gain traction.
“CMBS Delinquencies Reach 8.8%”
We will detail delinquencies by property type later in the week. We expect delinquencies to reach 10% before starting to decline later in the year.
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 | 2/7/2011 | 2/14/2011 | 2/21/2011 | 2/28/2011 | |
Office | 342 | 214 | 199 | 189 | 191 | 188 |
Retail | 326 | 207 | 188 | 181 | 179 | 177 |
Multifamily | 318 | 188 | 173 | 162 | 163 | 159 |
Industrial | 333 | 201 | 184 | 178 | 175 | 173 |
Average Asking Spread | 330 | 203 | 186 | 178 | 177 | 174 |
10-Year Treasury | 3.83% | 3.29% | 3.64% | 3.63% | 3.58% | 3.48% |
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): +4.79%
S & P 500 (2):+4.96%
NASDAQ (3): +4.89%
Russell 2000 (4):+4.78%
MSCI U.S. REIT (5):+3.43%
(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 | 2/18/2011 | 2/26/2011 | 3/4/2011 | |
3-Month | 0.12% | 0.09% | 0.12% | 0.11% |
6-Month | 0.18% | 0.14% | 0.15% | 0.15% |
2 Year | 0.59% | 0.75% | 0.71% | 0.68% |
5 Year | 2.01% | 2.27% | 2.16% | 2.18% |
10 Year | 3.29% | 3.58% | 3.48% | 3.49% |
Source: Bloomberg LLP. |