Cushman & Wakefield has published their Equity, Debt and Structured Finance Capital Markets Update for March 2013. Market highlights include the following:
- After 10-year treasury yields increased to 2.05% in mid February on speculation the Fed would ease QE, they declined to 1.84% last week after Bernanke told Congress that the central bank was maintaining its guidance that rates are likely to remain at record lows. There’s no evidence that the Fed’s unprecedented asset purchases risked sparking inflation or creating price bubbles, he said.
- As of February 27th, $15.4 billion of CMBS sales had been completed this year-to-date. After a couple of securitizations sold their 10-year AAAs for Swaps + 72 in January and early February, 10-year AAA spreads on the most recent securitizations have widened to S + 80+. In addition to global and political reasons, the recent volume that has been sold already this year and the robust pipeline attributed to this widening.
- Investor appetite for private real estate is growing, per research firm Preqin. Preqin revealed that a majority of private real estate fund investors expect to make new commitments and commit more capital to private real estate funds in 2013 than they did in 2012. Investors are also branching out beyond the core real estate investments and seeking higher return opportunities found in core-plus, nongateway markets, value-added and opportunistic strategies.
- With an increased amount of liquidity into commercial real estate funding arena coupled with the variety of debt options at low interest rates, we expect investment volume to pick up significantly in 2013, possibly as much as 20%.