The Trepp LLC survey showed spreads widening 10 to 15 basis point solely in reaction to Treasury yields dropping, then regaining a little luster. With the 10-year Treasury trading at 1.64 percent (as of June 9) and spreads averaging 228 basis points, all-in cost remains in the very attractive 4.00 percent range, subject to floor pricing by most lenders.
|
Asking Spreads over U.S. Treasury Bonds in Basis Points |
|||||
|
12/31/09 |
12/31/10 |
12/31/11 |
6/1/12 |
Month Earlier |
|
|
Office |
342 |
214 |
210 |
233 |
219 |
|
Retail |
326 |
207 |
207 |
230 |
209 |
|
Multifamily |
318 |
188 |
198 |
222 |
201 |
|
Industrial |
333 |
201 |
205 |
226 |
209 |
|
Average Spread |
330 |
203 |
205 |
228 |
195 |
|
10-Year Treasury |
3.83% |
3.29% |
1.88% |
1.72% |
1.95% |
The Cushman & Wakefield Sonnenblick-Goldman Commercial Mortgage Spread survey showed spreads for 10-year fixed rate mortgages widening 20 to 25 basis points during the survey period.
|
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage |
||||
|
12/31/10 |
2/28/12 |
3/28/12 |
4/27/12 |
5/30/12 |
|
|
Multifamily – Non-Agency |
+270 |
+240 |
+230 |
+240 |
+250 |
|
Multifamily – Agency |
+280 |
+210 |
+195 |
+200 |
+210 |
|
Regional Mall |
+280 |
+300 |
+275 |
+275 |
+300 |
|
Grocery Anchored |
+280 |
+290 |
+270 |
+270 |
+295 |
|
Strip and Power Centers |
|
+315 |
+295 |
+295 |
+320 |
|
Multi-Tenant Industrial |
+270 |
+310 |
+310 |
+285 |
+305 |
|
CBD Office |
+280 |
+310 |
+295 |
+270 |
+295 |
|
Suburban Office |
+300 |
+320 |
+310 |
+290 |
+315 |
|
Full-Service Hotel |
+320 |
+350 |
+350 |
+340 |
+360 |
|
Limited-Service Hotel |
+400 |
+360 |
+360 |
+350 |
+370 |
|
5-Year Treasury |
2.60% |
0.78% |
0.83% |
0.83% |
0.69% |
|
Source: Cushman & Wakefield Sonnenblick Goldman. |
|||||
|
Property Type |
Mid-Point of Fixed Rate Commercial Mortgage |
||||
|
12/31/10 |
2/28/12 |
3/28/12 |
4/27/12 |
5/30/12 |
|
|
Multifamily – Non-Agency |
+190 |
+210 |
+200 |
+210 |
+220 |
|
Multifamily – Agency |
+200 |
+180 |
+165 |
+170 |
+190 |
|
Regional Mall |
+175 |
+235 |
+275 |
+220 |
+245 |
|
Grocery Anchor |
+190 |
+230 |
+270 |
+200 |
+230 |
|
Strip and Power Centers |
|
+250 |
+290 |
+235 |
+260 |
|
Multi-Tenant Industrial |
+190 |
+250 |
+280 |
+240 |
+260 |
|
CBD Office |
+180 |
+320 |
+270 |
+220 |
+250 |
|
Suburban Office |
+190 |
+250 |
+290 |
+245 |
+270 |
|
Full-Service Hotel |
+290 |
+290 |
+325 |
+260 |
+295 |
|
Limited-Service Hotel |
+330 |
+315 |
+345 |
+290 |
+320 |
|
10-Year Treasury |
3.47% |
1.90% |
2.21% |
1.95% |
1.62% |
|
Source: Cushman & Wakefield Sonnenblick Goldman. |
|||||
|
Property Type |
Mid-Point of Floating-Rate Commercial Mortgage |
||||
|
12/31/10 |
2/28/12 |
3/28/12 |
4/27/12 |
5/30/12 |
|
|
Multifamily – Non-Agency |
+250-300 |
+200-250 |
+200-250 |
+200-250 |
+200-250 |
|
Multifamily- Agency |
+300 |
+220-265 |
+220-265 |
+220-265 |
+220-265 |
|
Regional Mall |
+275-300 |
+200-265 |
+200-265 |
+200-265 |
+210-275 |
|
Grocery Anchored |
+275-300 |
+200-275 |
+200-275 |
+200-275 |
+205-275 |
|
Strip and Power Centers |
|
+225-300 |
+225-300 |
+225-300 |
+225-300 |
|
Multi-Tenant Industrial |
+250-350 |
+225-305 |
+225-305 |
+225-305 |
+235-305 |
|
CBD Office |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
+225-300 |
|
Suburban Office |
+250-350 |
+250-325 |
+250-325 |
+250-325 |
+250-325 |
|
Full-Service Hotel |
+300-450 |
+275-400 |
+275-400 |
+250-400 |
+275-400 |
|
Limited-Service Hotel |
+450-600 |
+350-550 |
+325-450 |
+325-450 |
+325-450 |
|
1-Month LIBOR |
0.26% |
0.24% |
0.24% |
0.24% |
0.24% |
|
3-Month LIBOR |
0.30% |
0.49% |
0.47% |
0.47% |
0.47% |
|
* A dash (-) indicates a range. |
|||||
|
Source: Cushman & Wakefield Sonnenblick Goldman. |
|||||
Year-to-Date Public Equity Capital Markets
DJIA (1): +2.76%
S & P 500 (2): +5.41%
NASDAQ (3): +9.72%
Russell 2000 (4):3.82%
Morgan Stanley U.S. REIT (5):+9.13%
(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 |
12/31/11 |
6/9/2012 |
|
|
3-Month |
0.12% |
0.01% |
0.08% |
|
6-Month |
0.18% |
0.06% |
0.13% |
|
2 Year |
0.59% |
0.24% |
0.27% |
|
5 Year |
2.01% |
0.83% |
0.71% |
|
7 Year |
|
|
1.09% |
|
10 Year |
3.29% |
1.88% |
1.64% |
|
Key Rates (in Percentages) |
|||||
|
|
Current |
1 Mo. Prior |
3 Mo. Prior |
6 Mo. Prior |
1 Yr. Prior |
|
Fed Funds Rate |
0.17 |
0.16 |
0.12 |
0.08 |
.011 |
|
Federal Reserve Target Rate |
0.25 |
0.25 |
0.25 |
0.25 |
0.25 |
|
Prime Rate |
3.25 |
3.25 |
3.25 |
3.25 |
3.25 |
|
US Unemployment Rate |
8.20 |
8.10 |
8.30 |
8.70 |
9.00 |
|
1-Month Libor |
0.24 |
0.24 |
0.24 |
0.27 |
0.19 |
|
3-Month Libor |
0.47 |
0.47 |
0.48 |
0.53 |
0.25 |