Monday's Numbers and Newsworth News
Equity REITs are finally in positive territory for 2008!
Total Returns
| March 2008 | YTD | Dividend Yield | |
| Industrial | +8.78% | -4.79% | 4.19% |
| Office | +1.90% | -4.04% | 5.09% |
| Office/Industrial | +3.15% | -1.95% | 7.72% |
| Shopping Centers | +11.07% | +4.94% | 4.77% |
| Regional Malls | +9.22% | +2.16% | 4.65% |
| Freestanding Retail | +5.55% | -6.42% | 5.82% |
| Multifamily | +6.34% | +11.48% | 4.91% |
| Manufactured Homes | +4.77% | +5.02% | 4.55% |
| Diversified | +2.86% | +0.42% | 4.88% |
| Hospitality | -2.04% | -6.79% | 7.16% |
| Healthcare | +10.49% | +2.47% | 5.52% |
| Self-Storage | +9.82% | +20.23% | 3.17% |
| Specialty | +1.32% | -7.71% | 4.37% |
| Equity REIT Index | +6.23% | -1.40% | 4.99% |
"What a difference a year makes"
| March 28, 2008 | One Year Ago | Change | |
| Prime Rate | 5.25% | 8.25% | -3.00% |
| Federal Funds Rate | 2.25% | 5.25% | -3.00% |
| 3-Month LIBOR | 2.67% | 5.35% | -2.68% |
| 3-month Treasury | 1.35% | 5.05% | -3.70% |
| 10-year Treasury | 3.33% | 4.80% | -1.47% |
| 30-year Treasury | 3.50% | 4.60% | -0.47% |
Monday’s Numbers
Year-to-Date Equity Market Performance:
DJIA(1): -4.94%
S & P 500(2): -6.67%
NASDAQ(3): -10.61%
Russell 2000(4): -6.83%
MSCI U.S. REIT(5): -+6.85%
(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: (as of March 22, 2008)
3-month: 1.37%
6-month: 1.52%
2-Year: 1.82%
5-Year: 2.62%
10-Year: 3.47%
Pricing of Various Tranches of Commercial Mortgage-Backed Securities (as of March 12, 2008)
Rating; Term; Spread to U.S. Treasury Bonds
AAA; 5 years; +405 basis points
AAA; 10 years; +349 basis points
AA; 10 years; +917 basis points
A; 10 years; +1167 basis points
BBB; 10 years; +1567 basis points
BBB-; 10 years; +1867 basis points
BB; 10 years; +2550 basis points
B; 10 years; +2750 basis points
Source: Various Investment Banking firms such as Lehman Brothers, JP Morgan, and Morgan Stanley
Recent Real Estate Capital Markets Surveys
CohenFinancial Survey of Conduit Lenders:
5-Year term: 5-year Treasuries (2.51%) plus 550 basis points, or 8.00% “All-in”
10-Year term: 10-year Treasuries (3.44%) plus 527 basis points, or 8.71% “All-in”
CBRE Capital Markets “Market Watch” (March 12, 2009)
| Spread over Treasuries | Average Coupon Rate | |
| Commercial Mortgage-Backed Securities | 395 to 440 Basis Points | 7.68% |
| Conventional Mortgage | 250 to 310 Basis Points | 6.30% |
| Government Sponsored Entities | 240 to 250 Basis points | 5.95% |
| Floating Rate Mortgage | 290 to 365 Basis Points | 6.14% |
| Based upon 10 year, 75% loan-to-value, commercial loan. | ||
Indicated Spreads for Conventional Commercial Mortgages (as of March 13, 2008)
| Commercial Mortgage Rate Spreads for 5-10 Year Fixed-Rate Mortgages | ||
| Property Type | <65% LTV | >65% LTV |
| Multifamily | +200 - 220 | +220 - 250 |
| Regional Malls | +225 | +250 - 350 |
| Strip/Power Centers | +225 | +250 - 350 |
| Multi-Tenant Industrial | +225 - 300 | +250 - 400 |
| CBD Office | +225 - 275 | +250 - 400 |
| Suburban Office | +225 - 300 | +250 - 400 |
| Full-Service Hotel | +300 - 400 | +350 - 500 |
| Limited-Service Hotel | +300 - 400 | +350 - 500 |
| Source: Cushman & Wakefield Sonnenblick-Goldman, LLC. | ||
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