The equity and debt capital markets re-opened Wednesday as analysts started to assess the economic impact of Sandy while waiting for the jobs report which wasn’t released until Friday morning. The jobs numbers were better than the majority of analysts projected with upward adjustments to prior monthly totals an unexpected (and welcome) surprise.
Treasury yields ended the shortened week about where they started, with prices up a tick and yields down a tick, as investors sought shelter in the liquid and safe U.S. Treasury markets.
Many investors and lenders appear to have decided to sit on the sidelines until after the Presidential elections on Tuesday, preferring to wait it out for a few days until they can assess what the outlook may be under the different administrations.
The race to get to the finish line, i.e., to get deals closed by yearend, starts next Wednesday.
Monday’s Numbers
Due to service interruptions caused by Sandy, the publisher of the Trepp survey was unable to distribute its findings this week.
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 | 10/19 | Week Earlier | Month Earlier | |
Office | 342 | 214 | 210 | 221 | 225 | 223 |
Retail | 326 | 207 | 207 | 205 | 215 | 215 |
Multifamily | 318 | 188 | 202 | 198 | 210 | 201 |
Industrial | 333 | 201 | 205 | 206 | 216 | 215 |
Average Spread | 330 | 203 | 205 | 208 | 214 | 214 |
10-Year Treasury | 3.83% | 3.29% | 1.88% | 1.75% | 1.69% | 1.64% |
The Cushman & Wakefield Equity, Debt, and Structured Finance Commercial Mortgage Spread monthly survey of commercial mortgage spreads showed spreads for 10-year, fixed rate mortgages, coming in a uniform 5 basis points across all property sectors and terms over the past 30 days.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages | ||||
12/31/10 | 6/28/12 | 7/26/12 | 9/3/12 | 9/27/12 | |
Multifamily - Non-Agency | +270 | +245 | +245 | +240 | +235 |
Multifamily – Agency | +280 | +225 | +225 | +225 | +210 |
Regional Mall | +280 | +300 | +295 | +290 | +285 |
Grocery Anchored | +280 | +295 | +290 | +285 | +280 |
Strip and Power Centers |
| +320 | +315 | +310 | +305 |
Multi-Tenant Industrial | +270 | +305 | +300 | +295 | +290 |
CBD Office | +280 | +300 | +295 | +285 | +280 |
Suburban Office | +300 | +315 | +315 | +305 | +300 |
Full-Service Hotel | +320 | +360 | +360 | +360 | +355 |
Limited-Service Hotel | +400 | +370 | +370 | +370 | +365 |
5-Year Treasury | 2.60% | 0.69% | 0.57% | 0.68% | 0.64% |
Source: Cushman & Wakefield Equity, Debt, and Structured Finance. | |||||
Property Type | Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages | ||||
12/31/10 | 6/28/12 | 7/26/12 | 9/3/12 | 9/27/12 | |
Multifamily - Non-Agency | +190 | +220 | +220 | +210 | +205 |
Multifamily – Agency | +200 | +200 | +210 | +210 | +195 |
Regional Mall | +175 | +245 | +235 | +230 | +225 |
Grocery Anchor | +190 | +235 | +230 | +225 | +220 |
Strip and Power Centers |
| +255 | +250 | +245 | +240 |
Multi-Tenant Industrial | +190 | +260 | +255 | +250 | +245 |
CBD Office | +180 | +250 | +245 | +235 | +230 |
Suburban Office | +190 | +265 | +265 | +260 | +255 |
Full-Service Hotel | +290 | +290 | +290 | +290 | +285 |
Limited-Service Hotel | +330 | +310 | +310 | +310 | +305 |
10-Year Treasury | 3.47% | 1.58% | 1.42% | 1.64% | 1.64% |
Source: Cushman & Wakefield Equity, Debt, and Structured Finance. | |||||
Property Type | Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages | ||||
12/31/10 | 6/28/12 | 7/26/12 | 9/3/12 | 9/27/12 | |
Multifamily – Non-Agency | +250-300 | +200-260 | +200-260 | +200-260 | +200-260 |
Multifamily- Agency | +300 | +220-265 | +220-265 | +220-265 | +220-265 |
Regional Mall | +275-300 | +210-275 | +210-275 | +210-275 | +210-275 |
Grocery Anchored | +275-300 | +210-275 | +210-275 | +210-275 | +210-275 |
Strip and Power Centers |
| +225-300 | +225-300 | +225-300 | +225-300 |
Multi-Tenant Industrial | +250-350 | +235-305 | +230-305 | +230-305 | +230-305 |
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 | +275-400 | +275-400 | +275-400 | +275-400 |
Limited-Service Hotel | +450-600 | +325-450 | +325-450 | +325-450 | +325-450 |
1-Month LIBOR | 0.26% | 0.24% | 0.24% | 0.24% | 0.24% |
3-Month LIBOR | 0.30% | 0.47% | 0.46% | 0.43% | 0.43% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Equity, Debt, and Structured Finance. | |||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +7.17%
S & P 500 (2): +12.45%
NASDAQ (3): +14.47%
Russell 2000 (4):+9.92%
Morgan Stanley U.S. REIT (5):+11.91%
(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 | 11/3/12 | |
3-Month | 0.12% | 0.01% | 0.09% |
6-Month | 0.18% | 0.06% | 0.15% |
2 Year | 0.59% | 0.24% | 0.28% |
5 Year | 2.01% | 0.83% | 0.72% |
7 Year |
|
| 1.15% |
10 Year | 3.29% | 1.88% | 1.71% |
Key Rates (in Percentages) | |||||
| Current | 1 Mo. Prior | 3 Mo. Prior | 6 Mo. Prior | 1 Yr. Prior |
Fed Funds Rate | 0.17 | 0.17 | 0.06 | 0.15 | 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 | 7.90 | 7.80 | 8.30 | 8.10 | 8.90 |
1-Month Libor | 0.21 | 0.21 | 0.24 | 0.24 | 0.25 |
3-Month Libor | 0.31 | 0.25 | 0.44 | 0.47 | 0.43 |
