The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders continued to trend lower with average spreads down 5 basis points (0.05 percent) between September 3 and September 10. During the period, 10-year Treasury bond yields increased 4 basis points, with average all-in cost equal to equal to 4.95 percent.
Asking Spreads over U.S. Treasury Bonds in Basis Points | ||||||
12/31 | 7/23 | 8/6 | 8/13 | 9/3 | 9/10 | |
Office | 342 | 237 | 241 | 244 | 241 | 236 |
Retail | 326 | 225 | 229 | 234 | 229 | 221 |
Multifamily | 318 | 204 | 209 | 215 | 209 | 208 |
Industrial | 333 | 223 | 225 | 231 | 225 | 220 |
Average Asking Spread | 330 | 222 | 226 | 231 | 226 | 221 |
10-Year Treasury | 3.83% | 2.91% | 2.67% | 2.61% | 2.70% | 2.74% |
Source: Commercial Mortgage Alert; Trepp. |
CIBC World Markets is back in the securitized lending business, joining Bank of America, Bridger Commercial, Citigroup, Deutsche Bank, Goldman Sachs, Cantor Fitzgerald, C-III Capital, Laddder Capital, and Starwood Property.
A brief summary of CIBC’s lending program follows:
Fixed Rate | Floating Rate | |
Loan Size | $10 – 75 Million | Up to $100 million; in excess of $100 if syndicated |
Property | Stabilized in primary and secondary markets | Stabilized as well as transitional |
Term | 5, 7, 10 years | 1 to 3 years |
Loan-to-Value | 65% - 75% | 65% - 70% |
Interest Rate | 5.25% - 7.00% | 250 to 400 over Libor |
Spreads in the September 16 Cushman & Wakefield Sonnenblick-Goldman fixed and floating mortgage rate survey (below) remained basically unchanged from the prior survey period, most probably reflecting the end of summer final vacation period. Conservatively underwritten commercial real estate loans continue to be priced at sub-five percent levels.
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
1/6/10 | 7/28/10 | 8/12/10 | 8/31/10 | 9/16/10 | |
Multifamily - Non-Agency | +360 | +310 | +300 | +300 | +280 |
Multifamily – Agency | +220 | +240 | +240 | +240 | +240 |
Regional Mall | +450 | +330 | +300 | +290 | +290 |
Strip/Power Center | +460 | +350 | +325 | +300 | +300 |
Multi-Tenant Industrial | +435 | +320 | +300 | +280 | +280 |
CBD Office | +435 | +330 | +310 | +270 | +270 |
Suburban Office | +465 | +340 | +325 | 300 | +300 |
Full-Service Hotel | +500 | +430 | +400 | +400 | +400 |
Limited-Service Hotel | +500 | +450 | +450 | +450 | +450 |
5-Year Treasury | 2.60% | 1.71% | 1.58% | 1.41% | 1.51% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type | Mid-Point of Fixed Rate Commercial Mortgage | ||||
1/6/10 | 7/28/10 | 8/12/10 | 8/31/10 | 9/16/10 | |
Multifamily - Non-Agency | +300 | +190 | +180 | +180 | +180 |
Multifamily – Agency | +220 | +190 | +190 | +190 | +190 |
Regional Mall | +350 | +220 | +200 | +200 | +200 |
Strip/Power Center | +350 | +230 | +220 | +210 | +200 |
Multi-Tenant Industrial | +420 | +235 | +230 | +205 | +200 |
CBD Office | +330 | +235 | +210 | +225 | +190 |
Suburban Office | +355 | +240 | +225 | +225 | +220 |
Full-Service Hotel | +550 | +350 | +350 | +350 | +350 |
Limited-Service Hotel | +575 | +380 | 380 | +380 | +380 |
10-Year Treasury | 3.85% | 2.97% | 2.71% | 2.61% | 2.76% |
Source: Cushman & Wakefield Sonnenblick Goldman. |
Property Type | Mid-Point of Floating-Rate Commercial Mortgage | ||||
1/6/10 | 7/28/10 | 8/12/10 | 8/31/10 | 9/16/10 | |
Multifamily – Non-Agency | +300 – 400 | +275-300 | +275-300 | +275-300 | +275-325 |
Multifamily- Agency | NA | NA | NA | NA | NA |
Regional Mall | +475 – 600 | +300-350 | +300-350 | +275-350 | +275-350 |
Strip/Power Center | +450 – 650 | +300-350 | +300-350 | +275-350 | +275-350 |
Multi-Tenant Industrial | +400 – 500 | +275-350 | +275-350 | +250-350 | +250-350 |
CBD Office | +425 | +275-350 | +275-350 | +225-300 | +225-300 |
Suburban Office | +425 | +300-350 | +300-350 | +250-350 | +250-350 |
Full-Service Hotel | +600 | +400-550 | +400-550 | +375-550 | +375-500 |
Limited-Service Hotel | +750 | +450-600 | +450-600 | +450-600 | +450-550 |
1-Month LIBOR | 0.23% | 0.32% | 0.40% | 0.26% | 0.26% |
3-Month LIBOR | 0.25% | 0.48% | 0.62% | 0.31% | 0.31% |
* A dash (-) indicates a range. | |||||
Source: Cushman & Wakefield Sonnenblick Goldman. |
Year-to-Date Public Equity Capital Markets
DJIA (1): +1.72%
S & P 500 (2):+0.94%
NASDAQ (3): +2.05%
Russell 2000 (4): +2.74%
MSCI U.S. REIT (5):+18.21%
______
(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 | 9/17/10 | |
3-Month | .016% | 0.15% | 0.13% | 0.15% |
6-Month | 0.25% | 0.23% | .018% | 0.19% |
2 Year | 0.99% | 1.06% | 0.56% | 0.46% |
5 Year | 2.60% | 2.62% | 1.58% | 1.43% |
10 Year | 3.85% | 3.88% | 2.79% | 2.74% |
Source: Bloomberg LLP. |