Monday’s Numbers: May 7, 2012

According to the FTSE NAREIT Equity REIT Index, equity REITs produced total returns equal to 2.87 percent in April. The Trepp LLC survey showed spreads flat to widening by 5 basis points over the survey period as all-in costs remain attractive.

May 7, 2012

Facebook
Twitter
LinkedIn
Print
Copy
Link copied
Email

According to the FTSE NAREIT Equity REIT Index, equity REITs produced total returns equal to 2.87 percent in April.

The best performing sectors were regional malls (+5.80 percent) and self-storage (+4.23 percent). The worst performing sectors were timber (-2.42 percent) and industrial (-0.30 percent).

Year-to-date, the index is up 13.44 percent. The index’s dividend yield as of April 30^th was 3.27 percent.

Monday’s Numbers

The Trepp LLC survey showed spreads flat to widening by 5 basis points over the survey period as all-in costs remain attractive. Lender’s continue to defend spreads by maintaining “floor” pricing.

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	12/31/11	4/27/11	Month Earlier
Office	342	214	210	205	199
Retail	326	207	207	199	187
Multifamily	318	188	198	196	177
Industrial	333	201	205	195	181
Average Spread	330	203	205	199	183
10-Year Treasury	3.83%	3.29%	1.88%	1.93%	2.25%

Over the past month, the Cushman & Wakefield Sonnenblick-Goldman Survey narrowed, with 10-year rates improving as much as 40 basis points for some property sectors.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	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 Spreads For 10 Year Commercial Real Estate Mortgages
	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 Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	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⁾: +6.72%
S & P 500^(2):+8.87%
NASDAQ⁽³⁾: +13.48%
Russell 2000 ⁽⁴⁾:+6.88%
Morgan Stanley U.S. REIT ⁽⁵⁾:+12.22%
_____
^{(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	5/4/12
3-Month	0.12%	0.01%	0.07%
6-Month	0.18%	0.06%	0.13%
2 Year	0.59%	0.24%	0.25%
5 Year	2.01%	0.83%	0.78%
7 Year			1.28%
10 Year	3.29%	1.88%	1.88%

Key Rates (in Percentages)
	Current	1 Mo. Prior	3 Mo. Prior	6 Mo. Prior	1 Yr. Prior
Fed Funds Rate	0.16	0.16	0.11	0.07	0.10
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	0.26	0.25	0.21
3-Month Libor	0.47	0.47	0.53	0.44	0.27

Facebook
Twitter
LinkedIn
Print
Copy
Link copied
Email

Public

Stephen Blank

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.