Monday’s Numbers: September 13, 2010

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points. During the period, 10-year Treasury bond yields increased 9 basis points. Spreads in the August 31 Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey came in slightly.

September 13, 2010

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The Commercial Mortgage AlertTrepp weekly survey (below) of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points (0.05 percent) between August 13 and September 3. During the period, 10-year Treasury bond yields increased 9 basis points, with average all-in cost equal to 4.96 percent.

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	7/16	7/23	8/6	8/13	9/3
Office	342	221	237	241	244	241
Retail	326	214	225	229	234	229
Multifamily	318	198	204	209	215	209
Industrial	333	214	223	225	231	225

Average Asking Spread	330	211	222	226	231	226

10-Year Treasury	3.83%	2.99%	2.91%	2.67%	2.61%	2.70%
Source: Commercial Mortgage Alert; Trepp.

Spreads in the August 31 Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) came in slightly between August 12 and August 31, indicating that well underwritten commercial real estate loans remain sought after by financial institutions with all-in cost remaining below 5.0 percent.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	1/6/10	6/23/10	7/28/10	8/12/10	8/31/10
Multifamily - Non-Agency	+360	+325	+310	+300	+300
Multifamily – Agency	+220	+240	+240	+240	+240
Regional Mall	+450	+360	+330	+300	+290
Strip/Power Center	+460	+360	+350	+325	+315
Multi-Tenant Industrial	+435	+330	+320	+300	+290
CBD Office	+435	+340	+330	+310	+320
Suburban Office	+465	+360	+340	+325	+325
Full-Service Hotel	+500	+440	+430	+400	+400
Limited-Service Hotel	+500	+460	+450	+450	+450
5-Year Treasury	2.60%	2.06%	1.71%	1.58%	1.41%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages
	1/6/10	6/23/10	7/28/10	8/12/10	8/31/10
Multifamily - Non-Agency	+300	+190	+190	+180	+180
Multifamily – Agency	+220	+190	+190	+190	+190
Regional Mall	+350	+230	+220	+200	+200
Strip/Power Center	+350	+240	+230	+220	+210
Multi-Tenant Industrial	+420	+240	+235	+230	+205
CBD Office	+330	+240	+235	+210	+225
Suburban Office	+355	+250	+240	+225	+225
Full-Service Hotel	+550	+350	+350	+350	+350
Limited-Service Hotel	+575	+390	+380	380	+380
10-Year Treasury	3.85%	3.12%	2.97%	2.71%	2.61%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	1/6/10	6/23/10	7/28/10	8/12/10	8/31/10
Multifamily – Non-Agency	+300 – 400	+275 – 300	+275-300	+275-300	+275-300
Multifamily- Agency	NA	NA	NA	NA	NA
Regional Mall	+475 – 600	+300 – 350	+300-350	+300-350	+275-350
Strip/Power Center	+450 – 650	+300 – 350	+300-350	+300-350	+275-350
Multi-Tenant Industrial	+400 – 500	+275 – 350	+275-350	+275-350	+250-350
CBD Office	+425	+275 – 350	+275-350	+275-350	+225-300
Suburban Office	+425	+300 – 375	+300-350	+300-350	+250-350
Full-Service Hotel	+600	+400 – 550	+400-550	+400-550	+375-550
Limited-Service Hotel	+750	+450 – 600	+450-600	+450-600	+450-600
1-Month LIBOR	0.23%	0.35%	0.32%	0.40%	0.26%
3-Month LIBOR	0.25%	0.54%	0.48%	0.62%	0.31%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public
Equity Capital Markets DJIA ⁽¹⁾: +0.33%
S & P 500 ⁽²⁾:-0.50%
NASDAQ ⁽³⁾: -1.18%
MSCI U.S. REIT ⁽⁵⁾:+16.21% ^{______
(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
	1/6/10	4/9/10	9/10/10
3-Month	.016%	0.15%	0.13%
6-Month	0.25%	0.23%	.018%
2 Year	0.99%	1.06%	0.56%
5 Year	2.60%	2.62%	1.58%
10 Year	3.85%	3.88%	2.79%
Source: Bloomberg LLP.

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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.