Monday's Numbers and Noteworthy News
Indicated Spreads for Conventional Commercial Mortgages (as of April 30, 2008)
According to the most recent survey of indicated spreads for conventional commercial mortgage loans by Cushman & Wakefield Sonnenblick Goldman, spreads remained generally unchanged with a modest amount (25 basis points) of widening here and there. However, overall cost to borrowers spiked in the most recent survey due to the widening in spreads of 5-year Treasury bonds (+46 basis points in two weeks) and 10-year Treasury bonds (26 basis points in two weeks).
| Commercial Mortgage Rate Spreads for 5-10 Year Fixed-Rate Mortgages | ||
| Property Type | <65% LTV | >65% LTV |
| Multifamily | +230 - 260 | +250 - 300 |
| Regional Malls | +225 | +250 - 350 |
| Strip/Power Centers | +250 - 300 | +300 - 450 |
| Multi-Tenant Industrial | +250 - 300 | +300 - 500 |
| CBD Office | +225 - 325 | +325 - 450 |
| Suburban Office | +250 - 350 | +350 - 500 |
| Full-Service Hotel | +300 - 400 | +350 - 500 |
| Limited-Service Hotel | +300 - 450 | +400 - 500 |
| 5-Year treasury -- 3.14%; 10-Year Treasury -- 3.86% | ||
| Source: Cushman & Wakefield Sonnenblick-Goldman, LLC. | ||
"What a difference a year makes"
| April 30, 2008 | One Year Ago | Change | |
| Prime Rate | 5.00% | 8.25% | -3.25% |
| Federal Funds Rate | 2.00% | 5.25% | -3.25% |
| 3-Month LIBOR | 2.87% | 5.36% | -2.49% |
| 3-month Treasury | 1.45% | 4.86% | -3.41% |
| 10-year Treasury | 3.80% | 4.67% | -0.87% |
| 30-year Treasury | 4.53% | 4.84% | -0.31% |
Monday’s Numbers
Year-to-Date Equity Market Performance:
DJIA(1): -3.91%
S & P 500(2): -5.45%
NASDAQ(3): -7.80%
Russell 2000(4): -6.01%
MSCI U.S. REIT(5): 5.33%
(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 May 10, 2008)
3-month: 1.68%
6-month: 1.74%
2-Year: 2.24%
5-Year: 2.97%
10-Year: 3.77%
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; +253 basis points
AAA; 10 years; +231 basis points
AA; 10 years; +661 basis points
A; 10 years; +681 basis points
BBB; 10 years; +1511 basis points
BBB-; 10 years; +1811 basis points
BB; 10 years; +2100 basis points
B; 10 years; +2500 basis points
Source: Various Investment Banking firms such as Lehman Brothers, JP Morgan, and Morgan Stanley
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