Monday’s Numbers: August 1, 2011

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders showed spreads coming in at an average of 5 basis points during the survey period. Financing remains available in the 5 percent +/- range.

August 1, 2011

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Headlines

“Commercial Mortgage-Backed Securities Issuance Flat in 2^nd Quarter”

Issuance during the second quarter 2011 equaled $8.4 billion, slightly less than during the first quarter 2011 when issuance equaled $8.7 billion. Say what you might about this appearing anemic, it was seven times the issuance during the comparable period in 2010.

Issuance appears on track to reach somewhere between $35 and $40 billion in 2011.

Top loan originators were: J.P. Morgan; Deutsche Bank; Bank of America; UBS; and Morgan Stanley.

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders showed spreads coming in an average of 5 basis points during the survey period. Financing remains available in the 5 percent +/- range.

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	7/22/11
Office	342	214	176
Retail	326	207	170
Multifamily	318	188	159
Industrial	333	201	165
Average Asking Spread	330	203	168
10-Year Treasury	3.83%	3.29%	2.96%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended July 28th showed fixed rate spreads widening as much as 35 basis points while floating rate spreads remained unchanged in most property sectors. Financing continues to remain available at attractive and affordable rates.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	12/16/10	3/31/11	6/16/11	7/7/11	728/11
Multifamily - Non-Agency	+270	+245	+230	+230	+250
Multifamily – Agency	+280	+250	+210	+220	+240
Regional Mall	+280	+260	+265	+265	+280
Grocery Anchored	+280	+260	+250	+250	+270
Strip and Power Centers			+270	+270	+290
Multi-Tenant Industrial	+270	+265	+255	+260	+275
CBD Office	+280	+260	+255	+260	+275
Suburban Office	+300	+270	+270	+270	+295
Full-Service Hotel	+320	+300	+275	+285	+2300
Limited-Service Hotel	+400	+325	+310	+310	+320
5-Year Treasury	2.60%	2.23%	1.52%	1.64%	1.49%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 10 Year Commercial Real Estate Mortgages
	12/1610	3/31/11	6/16/11	7/7/11	728/11
Multifamily - Non-Agency	+190	+180	+185	+185	+195
Multifamily – Agency	+200	+185	+175	+180	+190
Regional Mall	+175	+180	+190	+190	+205
Grocery Anchor	+190	+185	+200	+200	+195
Strip and Power Centers			+195	+195	+210
Multi-Tenant Industrial	+190	+190	+190	+190	+230
CBD Office	+180	+180	+190	+190	+225
Suburban Office	+190	+190	+195	+195	+235
Full-Service Hotel	+290	+230	+225	+235	+250
Limited-Service Hotel	+330	+260	+245	+250	+270
10-Year Treasury	3.47%	3.45%	2.94%	3.09%	2.97%
Source: Cushman & Wakefield Sonnenblick Goldman.

Property Type	Mid-Point of Floating-Rate Commercial Mortgage Spreads For 3 - 5 Commercial Real Estate Year Mortgages
	12/16/10	3/31/11	6/16/11	7/7/11	728/11
Multifamily – Non-Agency	+250-300	+225-325	+200-260	+200-250	+200-250
Multifamily- Agency	+300	+250-310	+220-260	+220-260	+220-260
Regional Mall	+275-300	+225-300	+205-270	+205-270	+205-270
Grocery Anchored	+275-300	+225-300	+205-275	+205-275	+205-275
Strip and Power Centers			+225-300	+225-300	+225-300
Multi-Tenant Industrial	+250-350	+250-350	+230-325	+230-325	+230-325
CBD Office	+225-300	+225-300	+215-300	+215-300	+225-300
Suburban Office	+250-350	+275-350	+250-325	+250-325	+250-325
Full-Service Hotel	+300-450	+350-450	+350-450	+350-450	+350-450
Limited-Service Hotel	+450-600	+400-500	+400-500	+400-500	+400-500
1-Month LIBOR	0.26%	0.22%	0.19%	0.19%	0.19%
3-Month LIBOR	0.30%	0.28%	0.25%	0.25%	0.25%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets

DJIA ⁽¹⁾: +4.89%
S & P 500⁽²⁾:+2.75%
NASDAQ⁽³⁾: +3.90%
Russell 2000 ⁽⁴⁾:+1.75%
MSCI U.S. REIT ⁽⁵⁾:+9.95%

^{(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	7/31/2011
3-Month	0.12%	0.09%
6-Month	0.18%	0.15%
2 Year	0.59%	0.36%
5 Year	2.01%	1.36%
10 Year	3.29%	2.80%

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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.