The Real Estate Roundtable Sentiment Index (for Q2-2012)
- The index showed a slight uptick compared to the prior quarter as the U.S. economy basked (finally) in some positive economic growth. Survey participants remain concerned about continuing global macroeconomic concerns and political uncertainties.
- Respondents noted improved conditions as compared to a year ago; the majority feel this improvement will continue in the upcoming year.
- Most survey participants reported an increase in asset values over the last year. However, more than one-third of respondents predict pricing will remain flat going forward.
- Capital, particularly debt capital, has become increasingly available as compared to a year ago. However, participants predict continued, but slow, improvement.
Monday’s Numbers
The Trepp LLC survey showed spreads widening as much as 15 basis points for no apparent reason we know of except, possibly, the continuing crises in Europe and concerns that the U.S. will catch their flu.
Fortunately, money is plentiful with a majority of the widening of spreads offset by the lower yields on 10-year Treasury bonds.
Asking Spreads over U.S. Treasury Bonds in Basis Points | |||||
12/31/09 | 12/31/10 | 12/31/11 | 5/4/12 | Month Earlier | |
Office | 342 | 214 | 210 | 219 | 212 |
Retail | 326 | 207 | 207 | 209 | 196 |
Multifamily | 318 | 188 | 198 | 201 | 184 |
Industrial | 333 | 201 | 205 | 209 | 191 |
Average Spread | 330 | 203 | 205 | 210 | 196 |
10-Year Treasury | 3.83% | 3.29% | 1.88% | 1.95% | 2.10% |
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
12/31/10 | 1/26/12 | 2/28/12 | 3/28/12 | 4/27/12 | |
Multifamily - Non-Agency | +270 | +240 | +240 | +230 | +240 |
Multifamily – Agency | +280 | +245 | +210 | +195 | +200 |
Regional Mall | +280 | +300 | +300 | +275 | +275 |
Grocery Anchored | +280 | +295 | +290 | +270 | +270 |
Strip and Power Centers |
| +320 | +315 | +295 | +295 |
Multi-Tenant Industrial | +270 | +305 | +310 | +310 | +285 |
CBD Office | +280 | +310 | +310 | +295 | +270 |
Suburban Office | +300 | +320 | +320 | +310 | +290 |
Full-Service Hotel | +320 | +350 | +350 | +350 | +340 |
Limited-Service Hotel | +400 | +360 | +360 | +360 | +350 |
5-Year Treasury | 2.60% | 0.89% | 0.78% | 0.83% | 0.83% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
12/31/10 | 1/26/12 | 2/28/12 | 3/28/12 | 4/27/12 | |
Multifamily - Non-Agency | +190 | +210 | +210 | +200 | +210 |
Multifamily – Agency | +200 | +205 | +180 | +165 | +170 |
Regional Mall | +175 | +245 | +235 | +275 | +220 |
Grocery Anchor | +190 | +240 | +230 | +270 | +200 |
Strip and Power Centers |
| +255 | +250 | +290 | +235 |
Multi-Tenant Industrial | +190 | +255 | +250 | +280 | +240 |
CBD Office | +180 | +240 | +320 | +270 | +220 |
Suburban Office | +190 | +260 | +250 | +290 | +245 |
Full-Service Hotel | +290 | +290 | +290 | +325 | +260 |
Limited-Service Hotel | +330 | +315 | +315 | +345 | +290 |
10-Year Treasury | 3.47% | 1.97% | 1.90% | 2.21% | 1.95% |
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage | ||||
12/31/10 | 1/26/12 | 2/28/12 | 3/28/12 | 4/27/12 | |
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 | +210-265 | +200-265 | +200-265 | +200-265 |
Grocery Anchored | +275-300 | +200-275 | +200-275 | +200-275 | +200-275 |
Strip and Power Centers |
| +225-300 | +225-300 | +225-300 | +225-300 |
Multi-Tenant Industrial | +250-350 | +225-305 | +225-305 | +225-305 | +225-305 |
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 | +350-425 | +275-400 | +275-400 | +250-400 |
Limited-Service Hotel | +450-600 | +400-500 | +350-550 | +325-450 | +325-450 |
1-Month LIBOR | 0.26% | 0.27% | 0.24% | 0.24% | 0.24% |
3-Month LIBOR | 0.30% | 0.55% | 0.49% | 0.47% | 0.47% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +4.94%
S & P 500 (2): +7.62%
NASDAQ (3): +12.62%
Russell 2000 (4):+6.64%
Morgan Stanley U.S. REIT (5):+12.73%
_____
(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 | 5/11/12 | |
3-Month | 0.12% | 0.01% | 0.09% |
6-Month | 0.18% | 0.06% | 0.14% |
2 Year | 0.59% | 0.24% | 0.26% |
5 Year | 2.01% | 0.83% | 0.75% |
7 Year |
|
| 1.23% |
10 Year | 3.29% | 1.88% | 1.84% |
Key Rates (in Percentages) | |||||
| Current | 1 Mo. Prior | 3 Mo. Prior | 6 Mo. Prior | 1 Yr. Prior |
Fed Funds Rate | 0.16 | 0.16 | 0.12 | 0.07 | 0.08 |
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 | 8.10 | 8.20 | 8.30 | 8.90 | 9.00 |
1-Month Libor | 0.24 | 0.24 | 0.25 | 0.25 | 0.20 |
3-Month Libor | 0.47 | 0.47 | 0.51 | 0.46 | 0.26 |
