Monday’s Numbers: September 27, 2010

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders trended higher with average spreads up 8 basis points (0.08 percent) between September 3rd and September 17th. During the period, 10-year Treasury bond yields declined 14 basis points, with average all-in cost equal to equal to 4.89 percent.

September 27, 2010

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The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders trended higher with average spreads up 8 basis points (0.08 percent) between September 3^rd and September 17^th. During the period, 10-year Treasury bond yields declined 14 basis points, with average all-in cost equal to equal to 4.89 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	8/6	8/13	9/3	9/10	9/17
Office	342	241	244	241	236	248
Retail	326	229	234	229	221	231
Multifamily	318	209	215	209	208	207
Industrial	333	225	231	225	220	230

Average Asking Spread	330	226	231	226	221	229

10-Year Treasury	3.83%	2.67%	2.61%	2.70%	2.74%	2.60%
Source: Commercial Mortgage Alert; Trepp.

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 Spreads For 5 Year Commercial Real Estate Mortgages
	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 Spreads For 10 Year Commercial Real Estate Mortgages
	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 Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	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⁾: +4.14%
S & P 500⁽²⁾:+3.01%
NASDAQ⁽³⁾: +4.99%
Russell 2000 ⁽⁴⁾: +5.79%
MSCI U.S. REIT ⁽⁵⁾:+18.01%

^{(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	9/17/10	9/24/10
3-Month	.016%	0.15%	0.15%	0.14%
6-Month	0.25%	0.23%	0.19%	0.19%
2 Year	0.99%	1.06%	0.46%	0.44%
5 Year	2.60%	2.62%	1.43%	1.35%
10 Year	3.85%	3.88%	2.74%	2.60%
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.