Monday’s Numbers: July 18, 2011

The Commercial Mortgage Alert Trepp weekly survey of 15 active portfolio lenders remained unchanged during the most recent survey period with financing available in the 5 percent +/- range. The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended July 7 showed fixed and floating rate spreads remaining unchanged in most property sectors during the survey period with financing remaining available at attractive and affordable rates.

July 18, 2011

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“Extensions Causing Pileup of Maturing Loans”

The following is a portion of an article which appeared in this week’s issue of Commercial Mortgage Alert.

“Loan extensions by banks and other lenders have created a massive overhang of maturing commercial real estate loans—many of which are heavily overleveraged. CoStar projects a whopping $850 billion of commercial mortgages, multifamily mortgages, and construction loans are now due to mature this year. That’s more than twice as high as originally scheduled because of rollovers from previous years.”

Monday’s Numbers

The Commercial Mortgage Alert Trepp weekly survey (below) of 15 active portfolio lenders remained unchanged during the most recent survey period with financing 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	7/8/11
Office	342	214	181
Retail	326	207	172
Multifamily	318	188	161
Industrial	333	201	166

Average Asking Spread	330	203	171

10-Year Treasury	3.83%	3.29%	3.03%

The Cushman & Wakefield Sonnenblick-Goldman Survey for the period ended July 7 showed fixed and floating rate spreads remaining unchanged in most property sectors during the survey period with financing remaining 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	6/2/11	6/16/11	7/7/11
Multifamily - Non-Agency	+270	+245	+225	+230	+230
Multifamily – Agency	+280	+250	+200	+210	+220
Regional Mall	+280	+260	+255	+265	+265
Grocery Anchored	+280	+260	+245	+250	+250
Strip and Power Centers			+265	+270	+270
Multi-Tenant Industrial	+270	+265	+245	+255	+260
CBD Office	+280	+260	+250	+255	+260
Suburban Office	+300	+270	+260	+270	+270
Full-Service Hotel	+320	+300	+265	+275	+285
Limited-Service Hotel	+400	+325	+300	+310	+310
5-Year Treasury	2.60%	2.23%	1.62%	1.52%	1.64%
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	6/2/11	6/16/11	7/7/11
Multifamily - Non-Agency	+190	+180	+180	+185	+185
Multifamily – Agency	+200	+185	+170	+175	+180
Regional Mall	+175	+180	+180	+190	+190
Grocery Anchor	+190	+185	+175	+200	+200
Strip and Power Centers			+190	+195	+195
Multi-Tenant Industrial	+190	+190	+185	+190	+190
CBD Office	+180	+180	+180	+190	+190
Suburban Office	+190	+190	+190	+195	+195
Full-Service Hotel	+290	+230	+220	+225	+235
Limited-Service Hotel	+330	+260	+240	+245	+250
10-Year Treasury	3.47%	3.45%	2.99%	2.94%	3.09%
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	6/2/11	6/16/11	7/7/11
Multifamily – Non-Agency	+250-300	+225-325	+200-275	+200-260	+200-250
Multifamily- Agency	+300	+250-310	+220-270	+220-260	+220-260
Regional Mall	+275-300	+225-300	+205-275	+205-270	+205-270
Grocery Anchored	+275-300	+225-300	+215-285	+205-275	+205-275
Strip and Power Centers			+235-300	+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	+215-300
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⁾: +7.79%
S & P 500⁽²⁾:+4.65%
NASDAQ⁽³⁾: +5.16%
Russell 2000 ⁽⁴⁾:+5.76%
MSCI U.S. REIT ⁽⁵⁾:+10.57%
_____
^{(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	7/16/2011
3-Month	0.12%	0.01%
6-Month	0.18%	0.04%
2 Year	0.59%	0.35%
5 Year	2.01%	1.44%
10 Year	3.29%	2.91%

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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.