1. April 2, 2012
MARKET COMMENTARY
• CMBS spreads have continued to tighten over the past couple of weeks, with market. Trepp’s analysts are now looking hard at 2016, and the unusually high LTV’s
benchmark super-seniors now pricing at swaps + 220. Investor appetite for 7- and 10- in many of those securities.
year bonds has been relatively strong, with the result that 5-year conduit quotes are
essentially on top of 10-year quotes in terms of all-in pricing. • According to statistics providing by RCA and C&W Capital Markets, global CRE
transaction volume reached $808B in 2011, with Asia Pacific comprising nearly 50%
• Life insurance companies are showing an increasing willingness to quote loan terms of that total volume, Europe recovering to 2006 transaction levels and the U.S. at
greater than 10 years. We are now seeing active LC interest in 15, 20 and even 30 $200B, comparable to 2004 levels. In keeping with that trend, eight of the top-twenty
year maturities, with pricing starting at 4.25% for 15/15 deals and running up to 5.20% most active investors were Asian. Four U.S. investors made the top-twenty list with
for 30/30 deals. Blackstone grabbing the #1 spot with $9B of acquisitions. New York and London
were at the top of the list in terms of metro trading activity, at $35B and $29B,
• Trepp reported that CRE debt maturing in 2012 totals $360B while the five-year total respectively. LA and D.C. finished in the top five most active markets with $17B
for the period 2012-2016 is nearly $1.73T. Previously, many analysts had focused on each of transactions.
the 2012-2014 maturities as presenting the most challenging refinancing need in the
Subscribers to the Bloomberg Professional service can now access the CWSG Capital Markets update by typing CWSG<GO>.
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RECENT DEALS/CLOSINGS/QUOTES – DEBT
Asset Type Type of Financing Type of Lender Rate/Return Loan-to-Value Term Amortization/Comments
Office Floating Bank L + 250 65% 3 years plus two 12-month ext. IO
Office Fixed Bank 4.30% 70% 7 years 25 year
Office Fixed Bank 5.10% 70% 10 years 25 year
Office Fixed Life Company T + 200 60% 15 years 30 year
Office Floating Bank L + 235 60% 7 years 30 year, 3 Years IO
Office Fixed Bank 4.25% 75% 5 years 25 year
Multifamily Fixed Agency T + 240 75% 5 years 30 year
Multifamily Fixed Agency T + 230 75% 7 years 30 year
Multifamily Fixed Agency T + 210 75% 10 years 30 year
Hotel Floating Bank L + 300 55% 3 years plus two 12-month ext. IO
Hotel Floating Bank L + 300 60% 3 years plus two 12-month ext. 25 year
Office Fixed Bank S + 230 65% 5 years 30 year, 2 Years IO
Office Floating Bank L + 250 65% 5 years IO, 0.75% fee
Industrial Fixed Life Company 4.30% 70% 20 years 20 year
Industrial Fixed Life Company 4.90% 75% 20 years 20 year
2 3 4 5 8 10
RECENT DEALS/CLOSINGS/QUOTES - EQUITY
Asset Type Type of Financing Type of Investor Target Return Equity Contribution Levels Comments
Multi-Family Development JV Equity Insurance Company 22% 80%/20% 35% above 10%, 45% above 15%, 50% above 18%
Multi-Family Development JV Equity Opportunity Fund 22% 90%/10% 10% above 12%, 20% above 15%, 30% above 18%
Office Preferred Equity REIT 8% 100%/0% Up to 65% LTV
Mixed-Use - Development JV Equity Opportunity Fund 25% 75%/25% 20% above 12%, 25% above 20%, 30% above 25%
Retail Preferred Equity Pension Fund 10% 100%/% Up to 70% LTV
SENIOR & SUBORDINATE LENDING SPREADS BASE RATES
Maximum Loan-to-Value DSCR Spreads April 2, 2012 Two Weeks Ago One Year Ago
Fixed Rate - 5 Years 65 - 70% 1.30 - 1.50 T + 195 - 380 30 Day LIBOR 0.24% 0.24% 0.24%
Fixed Rate - 10 Years 60 - 70%* 1.30 - 1.50 T + 165 - 350 U.S. Treasury
Floating Rate - 5 Years 5 Year 1.03% 1.20% 2.23%
Core Asset <65%* 1.30 - 1.50 L + 200 + 325 10 Year 2.20% 2.39% 3.47%
Value Add Asset <65%* 1.25 - 1.40 L + 325 - 500 Swaps Current Swap Spreads
Mezzanine Moderate Leverage 65 - 80% 1.05 - 1.15 L + 700 + 900 5 Year 1.27% 0.24%
Mezzanine High Leverage 75 - 90% L + 1000 + 1400 10 Year 2.28% 0.08%
* 65 - 70% for Multi-Family (non-agency); Libor floors at 0-1%
10-YEAR FIXED RATE RANGES BY ASSET CLASS Cushman & Wakefield Sonnenblick Goldman has raised approximately
Maximum Loan-to-Value Class A Class B/C $25 billion of capital from more than 125 capital sources for 270
Anchored Retail 70 - 75% T + 270 T + 280 transactions in the past five years. For more information on this report
Strip Center 65 - 70% T + 290 T + 305 or on how we can assist your financing needs or hospitality or note
Multi-Family (non-agency) 70 - 75% T + 235 T + 240 sales, please contact any CWSG office or:
Multi-Family (agency) 75 - 80% T + 190 T + 195
Christopher T. Moyer
Distribution/Warehouse 65 - 70% T + 285 T + 300 Associate Director
R&D/Flex/Industrial 60 - 65% T + 295 T + 310 (212) 841-9220
Office 65 - 70% T + 270 T + 290 chris.moyer@cushwake.com
Full Service Hotel 55 - 65% T + 325 T + 350
* DSCR assumed to be greater than 1.35x
New York - HQ Atlanta Boston Los Angeles San Diego San Francisco Washington, D.C.
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T 212 841 9200 T 404 875 1000 T 617 330 6966 T 213 955 5100 T 858 452 6500 T 415 397 1700 T 202 467 0600