September 6, 2012MARKET COMMENTARY• Apparently, even the Greeks were tired of being in the limelight, which helped the    ...
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Cushman & Wakefield EDSF Capital Market Update - September 6, 2012

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Cushman & Wakefield EDSF Capital Market Update - September 6, 2012

  1. 1. September 6, 2012MARKET COMMENTARY• Apparently, even the Greeks were tired of being in the limelight, which helped the • Delinquency rates for CMBS moved higher in July, with Trepp reporting that thefinancing markets avoid another summer meltdown and allowed the market to build 30+ day delinquency rate had inched up 18bps to 10.34%. Surprisingly, despite thesome momentum going into the fourth quarter. CMBS lenders are reporting strong strong MF fundamentals we’re seeing in many markets and the easy access to GSEorigination volume and seem more comfortable than any time in the past few years financing at record low rates, the delinquency numbers for MF properties are thethat they will be able to book profits on the deals they’ve been warehousing. Spreads worst of any major asset class with delinquency rates for MF climbing to 15.69%.tightened steadily through July and August, though the market gave back about 5bps The best performing asset class is retail, where strengthening consumer spendingin spreads during the last two weeks. combined with the early wash-out of the sector’s weakest tenants, has helped retail assets relative to the office and industrial sectors.• We are halfway through the digestion period for the super-bubble of CRE loanmaturities that began in 2009 and is projected to peak in 2013. The good news is that • The investor flight to quality in gateway cities has led to prices in major marketsCRE maturities decline significantly after 2013, with a smaller spike in 2016-17 recovering more than twice as quickly as those in non-major markets. However, non-comprised of 10-year deals originated in 2006 and 2007. The bad news is that the major markets saw greater price appreciation over the last month, three- month andlending volume in the securitization market has not recovered to a level sufficient to 12-month periods, as investors continue to look beyond gateway markets in theirfill the refinancing gap, which means that special servicers will continue to be very quest for higher yields.busy for the next 18-24 months.Subscribers to the Bloomberg Professional service can now access the C&W EDSF Capital Markets 10 2 3 4 5 8 Update by typing CWSG<GO>. 18RECENT DEALS/CLOSINGS/QUOTES – DEBTAsset Type Type of Financing Type of Lender Rate/Return Loan-to-Value Term Amortization/CommentsOffice Fixed Life Company 3.50% 55% 7 years 30 yearOffice Fixed Bank 3.88% 65% 7 years 30 yearOffice Floating Bank L + 285 65% 3 years plus two 12-month ext. IORetail Floating Finance Company L + 375 65% 3 years plus two 12-month ext. IO, 4.25% floorRetail - Mall Fixed CMBS 4.57% 60% 10 years 30 year, 5 Years IORetail - Mall Floating CMBS L + 410 60% 2 years plus three 12-month ext. IOIndustrial Fixed Offshore Bank 4.32% 65% 24 years 24 yearMultifamily Fixed Agency 3.89% 75% 10 years 30 year, 3 Years IO;Office Fixed Life Company 3.75% 3 75% 50% 10 years IOOffice Fixed CMBS 4.46% 75% 10 years 30 yearOffice Fixed CMBS 4.35% 70% 5 years 30 yearMixed-Use Fixed CMBS 4.75% 75% 10 years 30 yearMixed-Use Floating Finance Company 5.50% 70% 3 years plus two 12-month ext. 23 yearOffice - Suburban Fixed Finance Company 6.00% 80% 10 years 30 yearOffice - Suburban Fixed Bank 3.25% 55% 7 years 30 year, 5 Years IO 2 3 4 5 8 10RECENT DEALS/CLOSINGS/QUOTES - EQUITYAsset Type Type of Financing Type of Investor Target Return Equity Contribution Levels CommentsRetail - Development JV Equity REIT 25.0% 50%/50% 50% above 18%Multi-Family Portfolio Preferred Equity REIT 10.5% 100.0% Up to 82% LTVMulti-Family Development JV Equity Hedge Fund 35.0% 85%/15% 10% pref, 20% > 10%, 30% > 20%, 40% > 30%Mixed-Use Preferred Equity REIT 11.0% 100%/% Up to 75% LTVMulti-Family Development JV Equity Insurance Company 22.0% 100% 35% above 10%, 45% above 15%, 50% above 18%SENIOR & SUBORDINATE LENDING SPREADS BASE RATES Maximum Loan-to-Value DSCR Spreads September 6, 2012 Two Weeks Ago One Year AgoFixed Rate - 5 Years 65 - 70% 1.30 - 1.50 T + 215 - 415 30 Day LIBOR 0.24% 0.24% 0.23%Fixed Rate - 10 Years 60 - 70%* 1.30 - 1.50 T + 200 - 365 U.S. TreasuryFloating Rate - 5 Years 5 Year 0.63% 0.71% 0.87% Core Asset <65%* 1.30 - 1.50 L + 200 + 325 10 Year 1.62% 1.68% 2.00% 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 0.80% 0.17%Mezzanine High Leverage 75 - 90% L + 900 + 1400 10 Year 1.72% 0.10%* 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 + 290 T + 300 capital sources for 270 transactions in the past five years. For moreStrip Center 65 - 70% T + 310 T + 320 information on this report or on how we can assist your financingMulti-Family (non-agency) 70 - 75% T + 240 T + 245 needs or hospitality or note sales, please contact any of our offices. officeMulti-Family (agency) 75 - 80% T + 225 T + 230 Christopher T. MoyerDistribution/Warehouse 65 - 70% T + 295 T + 305 Associate DirectorR&D/Flex/Industrial 60 - 65% T + 310 T + 325 (212) 841-9220Office 65 - 75% T + 290 T + 305 chris.moyer@cushwake.comFull Service Hotel 55 - 65% T + 340 T + 365* DSCR assumed to be greater than 1.35x New York - HQ Atlanta Boston Chicago Los Angeles San Diego San Francisco Washington, D.C. 1290 Avenue of the Americas 55 Ivan Allen Jr. Blvd. 125 Summer Street 200 S. Wacker Drive 601 S. Figueroa St. 4747 Executive Drive One Maritime Plaza 2001 K Street, NW 8th Floor Suite 700 Suite 1500 Suite 2800 Suite 4700 Suite 900 Suite 900 Suite 700 New York, NY 10104 Atlanta, GA 30308 Boston, MA 02110 Chicago, IL 60606 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 312 470 1800 T 213 955 5100 T 858 452 6500 T 415 397 1700 T 202 467 0600

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