Capital Markets Update – May 2014

  • The U.S. economy added 288,000 jobs in April, the largest monthly increase in more than two years, and the unemployment rate fell from 6.7% in March to 6.3% in April as the number of unemployed persons plunged to its lowest level in more than five years.
  • Moody’s US CMBS Q1 Review was titled “As Conduit Lending Competition Heats Up, CMBS Market Faces Risk of ‘Boiling Frog Syndrome.”  The report included such findings as in the first quarter, approximately one in five conduit loans had underwritten LTVs of roughly 75%, which is typically the maximum for lending programs. This share will likely exceed one in four during the second quarter of 2014.
  • RCA reported that investment trends remained strong in Q1 with sale volume of $87B, up 15% YOY, and pricing trends remained positive across all property types. Among the property types, retail was the clear winner in terms of volume gains with individual sales surging 70% and overall volume up 147% YOY.
  • CMBS loan defeasance volumes increased 116% last year, with 919 loans with a balance of $12.3 billion getting replaced by government securities, according to Morningstar Credit Ratings. Last year’s increase in volume was due to low interest rates, an active lending environment, increased property values, and increased sales activity. Defeased loans averaged a 5.78% coupon, compared to loans that were securitized averaging a 4.57% coupon.

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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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