Capital Markets Update – November 2013

  • The MBA recently announced that third quarter commercial/multifamily origination volumes were up 29% YOY. The increase in originations was led by CMBS which increased lending 105% YOY and life insurance companies which had a 72% YOY increase. Originations by property type were led by health care properties which increased 124% YOY followed by office properties which increased 69% YOY.
  • Payrolls rose by 148,000 in September which indicates the economy may have lost some of what momentum there was leading up to the government shutdown. Based on several recent survey including the Bloomberg News survey of economists, the Federal Reserve is not expected to begin to slow bond purchasing until at least March 2014. With treasuries anticipated to remain low for the next couple of months, financing activity should continue to increase.
  • CMBS spreads have continued to decline gradually as AAAs have settled at ~105 and BBB- spreads have continued to decline to sub-400. AAAs and BBB-s are still ~20 and ~80 basis points wide, respectively, of where they were in early May, but the gradual narrowing is a positive sign for the markets. The improvement for BBB- spreads is also an indication that investors are willing to take on more risk.
  • Hospitality continues to gain favor among balance sheet lenders and is becoming an essential part of a loan portfolio. This increase in allocation is being driven largely by the lending market’s current competitiveness within the main food groups. Furthermore, numerous recent hospitality financings have been provided by regional banks and international finance companies that are new to the sector. (See 3Q 2013 C&W EDSF Hospitality  Report)

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About Cushman & Wakefield/NorthMarq

​Cushman & Wakefield/NorthMarq is a joint venture formed in September 2011 by NorthMarq Real Estate Services and the Minnesota operations of global real estate services firm Cushman & Wakefield. By combining the talent of both organizations at the regional level with the global platform of Cushman & Wakefield, we offer clients the best combination of regional strength and global capabilities. The result: the leading commercial real estate firm by all measures in the Upper Midwest.
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