Monday’s Numbers: September 19, 2011

According to an analysis by REIT Cafe, multifamily REITs have “thrived,” helped by Echo Boomers among the various age cohorts. The Trepp LLC survey showed spreads continuing at current levels, reflecting a “wait and see” attitude. Deals are getting done at slightly wider spreads as market participants wait out the impact of the Euro-credit crises on U.S. capital markets.

September 19, 2011

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“Mirror, Mirror on the Wall; Who’s the Best Performing REIT Sector of All?”

According to an analysis by REITCafe, multifamily REITs have “thrived,” helped by Echo Boomers among the various age cohorts. REITCafe is an on-line information service dedicated to providing investors and other participants in the REIT space with timely REIT research, data, and commentary.

Year-to-date through September 14^th, the multifamily sector gained 16.4 percent as compared to 2.0 percent for the overall FTSE All Equity REIT Index. The 16 multifamily REITs comprise 17+/- percent of the value of the overall index.

Monday’s Numbers

The Trepp LLC survey showed spreads continuing at current levels, reflecting a “wait and see” attitude. Deals are getting done at slightly wider spreads as market participants wait out the impact of the Euro-credit crises on U.S, capital marekets.

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	9/9/11
Office	342	214	220
Retail	326	207	212
Multifamily	318	188	210
Industrial	333	201	214
Average Asking Spread	330	203	207
10-Year Treasury	3.83%	3.29%	1.92%

We expect the Cushman & Wakefield Sonnenblick-Goldman Survey will be updated during the upcoming week.

Property Type	Mid-Point of Fixed Rate Commercial Mortgage Spreads For 5 Year Commercial Real Estate Mortgages
	12/16/10	3/31/11	7/28/11	8/11/11	8/24/11
Multifamily - Non-Agency	+270	+245	+250	+255	+265
Multifamily – Agency	+280	+250	+240	+265	+250
Regional Mall	+280	+260	+280	+290	+290
Grocery Anchored	+280	+260	+270	+285	+285
Strip and Power Centers			+290	+300	+300
Multi-Tenant Industrial	+270	+265	+275	+295	+285
CBD Office	+280	+260	+275	+290	+290
Suburban Office	+300	+270	+295	+300	+300
Full-Service Hotel	+320	+300	+230	+320	+320
Limited-Service Hotel	+400	+325	+320	+340	+340
5-Year Treasury	2.60%	2.23%	1.49%	0.97%	0.96%
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	7/28/11	8/11/11	8/24/11
Multifamily - Non-Agency	+190	+180	+195	+240	+240
Multifamily – Agency	+200	+185	+190	+245	+230
Regional Mall	+175	+180	+205	+240	+255
Grocery Anchor	+190	+185	+195	+230	+250
Strip and Power Centers			+210	+250	+260
Multi-Tenant Industrial	+190	+190	+230	+240	+250
CBD Office	+180	+180	+225	+240	+255
Suburban Office	+190	+190	+235	+260	+260
Full-Service Hotel	+290	+230	+250	+275	+275
Limited-Service Hotel	+330	+260	+270	+295	+280
10-Year Treasury	3.47%	3.45%	2.97%	2.23%	2.16%
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	8/11/11	7/28/11	824/11
Multifamily – Non-Agency	+250-300	+225-325	+220-260	+200-250	+220-260
Multifamily- Agency	+300	+250-310	+230-270	+220-260	+230-270
Regional Mall	+275-300	+225-300	+220-270	+205-270	+220-270
Grocery Anchored	+275-300	+225-300	+210-275	+205-275	+210-275
Strip and Power Centers			+235-300	+225-300	+235-300
Multi-Tenant Industrial	+250-350	+250-350	+250-325	+230-325	+250-325
CBD Office	+225-300	+225-300	+235-300	+225-300	+235-300
Suburban Office	+250-350	+275-350	+265-325	+250-325	+265-325
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%	0.21%	0.19%	0.22%
3-Month LIBOR	0.30%	0.28%	0.29%	0.25%	0.31%
* A dash (-) indicates a range.
Source: Cushman & Wakefield Sonnenblick Goldman.

Year-to-Date Public Equity Capital Markets
DJIA ⁽¹⁾: -0.59%
S & P 500⁽²⁾:-3.31%
NASDAQ⁽³⁾: -1.15%
Russell 2000 ⁽⁴⁾:-8.85%
MSCI U.S. REIT ⁽⁵⁾:+2.45%
_____
^{(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	9/17/2011
3-Month	0.12%	0.00%
6-Month	0.18%	0.02%
2 Year	0.59%	0.17%
5 Year	2.01%	0.91%
10 Year	3.29%	2.05%

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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.