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| Weekly Interest Rate Tracking |
| October 3, 2008 |
Good Afternoon,
Attached is a PDF copy of Colliers Meredith & Grew's interest rate sheet that includes current and historical Treasury, LIBOR and Prime interest rates, which are updated daily with real time data from Strategic Alliance Mortgage.
We provide these updates on a weekly basis to keep our clients and colleagues aware of rate movements. We hope you find this information helpful.
DOWNLOAD INTEREST RATE SHEET (98KB)
The following Market Perspective provides insights and commentary on breaking news and emerging trends in commercial real estate finance.
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Oct. 3 (Bloomberg) -- "Money-market rates jumped to records" (Friday). LIBOR, the rate that banks charge each other for three-month loans in euros climbed to 5.33%, an all-time high, the British Bankers' Association (BBA) said. The corresponding rate for dollars increased to 4.33%, the most since January. The LIBOR-OIS spread, a gauge of cash scarcity among banks, widened to a record...It's the third consecutive day the spread has risen to an all-time high. LIBOR, set before noon in London every day after a survey conducted by the BBA on the cost of dollars, euros and eight other currencies, determines prices for financial contracts valued at $393 trillion as of Dec. 31, influencing consumer interest rates on everything from home loans to credit cards. Efforts by central banks around the world to thaw lending by pumping money into the financial system have failed as banks hoard cash on concern loans to other financial institutions won't be repaid. The U.S. House of Representatives will (re)consider a $700 billion package today designed to remove tainted assets from bank balance sheets."
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Oct. 3 (Wall Street Journal) -- "Businesses are dumping office space (about 18 million sq. ft. for the 3rd quarter 2008) at the fastest pace since the months after the Sept. 11 attacks, increasing the financial stress on commercial-real-estate owners and their lenders, many of them already ailing financial institutions. Nationwide, rents on office properties -- including landlord concessions and discounts -- were flat in the third quarter, the worst result for office-property owners since late 2004 -- when commercial real estate began to emerge from a prolonged slump, according to Reis Inc., a New York real-estate research firm. Rent stagnation and increasing vacancies put "strain on borrowers to make payments on mortgages," said Sam Chandan, Reis's chief economist. "It hasn't shown up yet in terms of delinquency rates, but this is clearly an issue we need to be very attentive to," he said."
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Colliers Meredith & Grew Perspective: Many life companies are still actively pursuing new business, taking advantage of the down market to reign in new clients. But for every lender still in the game there seems to be a counterpart that has called it quits for the balance of the year. Those that have left the market are (for the most part) no longer quoting business or accepting applications for 2008. And for those lenders that are looking at deals - and as one lender aptly described it, only "cream puff" deals will be quoted - capital is tight and spreads have widened to 300-350 bps - nearly double that of one year ago. It is important to note that with the recent flight to safety of government debt - yields on Treasuries have largely kept coupon rates on whole loans relatively in check compared to one-year ago.
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| Please contact the Capital Markets Group at Colliers Meredith & Grew with any financing questions.
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Colliers Meredith & Grew is a Boston-based commercial real estate company with integrated service groups including Brokerage, Capital Markets, Counseling & Valuation, Development & Advisory, Investment Sales, and Property & Asset Management. In addition to representing its core clients in New England, Colliers Meredith & Grew provides national and international real estate services to its multi-market clients as a member of Colliers International and as an owner/member of Strategic Alliance Mortgage LLC (SAM). Colliers International is a worldwide affiliation of independently owned and operated companies in more than 290 offices in 61 countries. |
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