Cushman & Wakefield has published their Equity, Debt and Structured Finance Capital Markets Update for May 2013. Market highlights include the following:
- MBA released their Quarterly Survey of Mortgage Bankers Originations last week. First quarter commercial/multifamily origination volumes were up 9% YOY. The increase in originations was led by conduits which continued to increase lending with a 170% YOY increase and GSEs which had a 36% YOY increase. Originations by property type were led by hotels which increased 35% YOY followed by multifamily which increased 30% YOY.
- After touching 2.07% in early March, 10-year US treasury rates continue to decline. The FOMC sent mixed signals last week regarding the purchase of treasuries and MBS. The FOMC says it “is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.”
- Capital flows are strong and capital available for investment is high. Preqin’s dry powder estimate, which is based on funds raised but not yet deployed, targeting US real estate is approximately $80 billion. Additionally, there is approximately $45 billion of dry powder from REITs and non-fund investors based on a recent C&W survey which brings total capital ready for investment to approximately $125 billion.
- After a strong start to the year for investment sales and expectations for an accelerated economic recovery in the second half of 2013, C&W forecasts that US investment sales for calendar 2013 will increase 15-20% YOY.