Capital Markets Update – August 2014

  • The major economic releases last week indicate that the U.S. economy has rebounded from the first quarter contraction and has strong momentum going into the second half of the year. U.S. GDP grew at a 4.0% annual rate in 2Q 2014, more than offsetting the 2.1% decline recorded in the first quarter. Payroll employment in the U.S. increased by 209,000 jobs in July, marking the sixth consecutive month that the economy has added more than 200,000 jobs. Please see the C&W Research Weekly Economic Update attached for additional information.
  • Despite the positive U.S. economic news, global events including but not limited to Ukraine/Russia, Middle East conflict, Argentina, and Eurozone’s fragile recovery have helped keep 10-YR UST yields in the 2.5-2.6% range for most of the past month as investors sought safety in USTs.
  • Preqin reported that as of June 2014, the level of uncalled investor capital (dry powder) for closed-end private real estate funds globally stood at a high of $206 billion, having increased by almost $50 billion in the past 18 months. More than half of the capital, $110 billion is allocated to North America. Europe-focused private real estate funds had $59 billion of dry powder.
  • July was a good month for borrowers as AAA CMBS spreads continued to grind tighter. Five conduit deals totaling $6.25 billion all priced their AAA spreads in the 70s in July. There was also five single borrower transaction totaling $2 billion in July with AAA spreads ranging from 70-100 bps.

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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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