May 31, 2012MARKET COMMENTARY• Five- and ten-year U.S. Treasury rates hit historic lows this week as concerns about       ...
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Cushman & wakefield capital markets update - 5 31 12

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Cushman & wakefield capital markets update - 5 31 12

  1. 1. May 31, 2012MARKET COMMENTARY• Five- and ten-year U.S. Treasury rates hit historic lows this week as concerns about years, are already close to, or at, the 25% level with significant holdings in timber,the European markets motivated investors to find safe havens for their capital. At the mining, real estate, etc...same time, CMBS spreads have been under steady upward pressure and securitizedlenders have, hoping to avoid a reprise of 2011’s “summer swoon,” responded by • CMBS delinquency rates (30 days+) spiked another 24bp’s in May, settling atwidening lending quotes and underwriting more cautiously. 10.04% and breaking through the 10% barrier for the first time since the recession began. May’s numbers are consistent with the trend we’ve been watching since• JPM Asset Management is reportedly about to release a white paper suggesting December and reflect the continuing inability of many borrowers to refinance 5-yearthat allocations to “real assets” (e.g., real estate, REIT shares, timber, infrastructure deals written in 2007. The significant increase is entirely driven by growing officeand commodities) should rise to 25% in the coming years. For most investment delinquency, which rose 67 basis points in April and is projected to rise again in May.managers, real assets currently comprise 5-10% of total AUM. The change in strategy The good news is that all other asset classes – retail, lodging, multifamily andis being driven by a desire for better yield, and the realization that the poor yields industrial -- continue to show moderate but steady improvement with delinquencybeing offered in the fixed income market may not improve soon. Interestingly, many rates flat or slightly down month-over-month.Canadian pension plans, which generally performed strongly during the past fewSubscribers to the Bloomberg Professional service can now access the C&W Capital Markets Update by typing CWSG<GO>. 18 2 3 4 5 8 10RECENT DEALS/CLOSINGS/QUOTES – DEBTAsset Type Type of Financing Type of Lender Rate/Return Loan-to-Value Term Amortization/CommentsMultifamily Fixed CMBS S + 290 75% 10 years 30 yearHotel Fixed Bank 3.90% 50% 5 years 30 yearIndustrial Fixed Life Company 4.31% 72% 20 years 20 yearOffice Fixed Life Company 5.25% 75% 5 years 25 yearMultifamily - Const./Perm. Fixed Life Company 5.25% 65% (LTC) 10 years 30 yearOffice Fixed Life Company 5.00% 55% 20 years 25 yearRetail Fixed CMBS 5.47% 67% 10 years 30 yearRetail - Mall Fixed CMBS 5.40% 64% 10 years 30 yearRetail - Mall Fixed CMBS 4.23% 51% 10 years IO, Ala Moana CenterHotel - Mezzanine Me anine Fi ed Fixed REIT 12 00% 12.00% 63% 2 years plus one 12 month ext 12-month ext. IO 1% in and 1 5% o t IO, 1.5% outHotel Floating REIT L + 720 79% 3 years plus two 12-month ext. IO, 1% in and 1% outRetail - Condominium Fixed Life Company 4.50% 60% 5 years IORetail - Grocery Anchored Fixed Life Company 3.45% 65% 5 years 25 yearRetail - Grocery Anchored Fixed Life Company 3.85% 65% 10 years 25 yearRetail - Grocery Anchored Fixed CMBS 5.10% 72% 5 years 30 year 2 3 4 5 8 10RECENT DEALS/CLOSINGS/QUOTES - EQUITYAsset Type Type of Financing Type of Investor Target Return Equity Contribution Levels Comments 10% pref, 20% above 10%, 30% above 20%, 40%Multi-Family Development JV Equity Hedge Fund 35% 85%/15% above 30%Mixed-Use Preferred Equity REIT 11% 100% Up to 75% LTVMulti-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% Up to 65% LTVSENIOR & SUBORDINATE LENDING SPREADS BASE RATES Maximum Loan-to-Value DSCR Spreads May 31, 2012 Two Weeks Ago One Year AgoFixed Rate - 5 Years 65 - 70% 1.30 - 1.50 T + 210 - 425 30 Day LIBOR 0.24% 0.24% 0.19%Fixed Rate - 10 Years 60 - 70%* 1.30 - 1.50 T + 190 - 375 U.S. TreasuryFloating Rate - 5 Years 5 Year 0.67% 0.74% 1.65% Core Asset <65%* 1.30 - 1.50 L + 200 + 325 10 Year 1.58% 1.70% 3.02% Value Add Asset <65%* 1.25 - 1.40 L + 325 - 500 Swaps Current Swap SpreadsMezzanine Moderate Leverage 65 - 80% 1.05 - 1.15 L + 700 + 900 5 Year 1.01% 0.34%Mezzanine High Leverage 75 - 90% L + 1000 + 1400 10 Year 1.74% 0.16%* 65 - 70% for Multi-Family (non-agency); Libor floors at 0-1%10-YEAR FIXED RATE RANGES BY ASSET CLASS Cushman & Wakefields Equity, Debt and Structured Finance Group Maximum Loan-to-Value Class A Class B/C has raised approximately $25 billion of capital from more than 125Anchored Retail 70 - 75% T + 310 T + 320 capital sources for 270 transactions in the past five years. For moreStrip Center 65 - 70% T + 330 T + 345 information on this report or on how we can assist your financingMulti-Family (non-agency) 70 - 75% T + 245 T + 250 needs or hospitality or note sales, please contact any of our offices or:Multi-Family (agency) 75 - 80% T + 210 T + 215 Christopher T. MoyerDistribution/Warehouse 65 - 70% T + 315 T + 330 Associate DirectorR&D/Flex/Industrial 60 - 65% T + 325 T + 340 (212) 841-9220Office 65 - 70% T + 305 T + 325 chris.moyer@cushwake.comFull Service Hotel 55 - 65% T + 350 T + 375* DSCR assumed to be greater than 1.35x New York - HQ Atlanta Boston Los Angeles San Diego San Francisco Washington, D.C. 1290 Avenue of the Americas 55 Ivan Allen Jr. Blvd. 125 Summer Street 601 S. Figueroa St. 4435 Eastgate Mall One Maritime Plaza 2001 K Street, NW 8th Floor Suite 700 Suite 1500 Suite 4700 Suite 200 Suite 900 Suite 700 New York, NY 10104 Atlanta, GA 30308 Boston, MA 02110 Los Angeles, CA 90017 San Diego, CA 92121 San Francisco, CA 94111 Washington, DC 20006 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

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