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| Weekly Interest Rate Tracking |
| July 22, 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 (108KB)
The following Market Perspective provides insights and commentary on breaking news and emerging trends in commercial real estate finance.
- Bloomberg: Treasuries fell this morning as Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank should raise interest rates "sooner rather than later'' and traders prepared for the sale of $58 billion in government debt this week. Two-year notes, more sensitive to monetary policy than longer maturities, more than erased yesterday's gains. Bonds also declined after Treasury Secretary Henry Paulson predicted lawmakers will pass a bill to shore up confidence in government- sponsored enterprises Fannie Mae and Freddie Mac. The yield on the 10-year note advanced 6 basis points to 4.10% at 11:21 a.m. in New York, according to BGCantor. The two-year note yield rose 12 basis points to 2.70%.
- AP/Financial Times: Wachovia reported an $8.9 billion second-quarter loss Tuesday. The fourth largest US bank by assets is cutting its dividend for the second time in three months and said it would shed more than 6,000 jobs, only shortly after replacing its chief executive. "The bank's surprisingly large second-quarter loss deflated Wall Street's hopes that the nation's big banks are weathering the credit crisis well."
- Wall Street Journal: The stability of Fannie Mae and Freddie Mac is key to erasing underlying uncertainty in U.S. financial markets and making way for an economic recovery, Treasury Secretary Henry Paulson said Tuesday, while voicing confidence that Congress will approve a rescue plan for the mortgage giants this week."Reuters: Congressional budget analysts on Tuesday put a $25 billion cost estimate on a Bush administration plan to bolster mortgage finance giants Fannie Mae and Freddie Mac, but raised questions about a key assumption underlying the plan. CBO estimated there is a "probably better than 50 percent" chance that the proposed new Treasury authority would not be used before it expired at the end of December 2009" but added "That scenario is far from the only possible result. Indeed, many analysts and traders believe that there is a significant likelihood that conditions in the housing and financial markets could deteriorate more than already reflected on the GSEs' balance sheets, and such continuing problems would increase the probability that this new authority would have to be used."
- Seeking Alpha: U.S. commercial real estate (CRE) prices are down 8.8% from the peak in October 2007. US CRE prices have registered their largest monthly decline since the inception of the Moody’s/REAL Index. Moody’s said the Index stood at 174.97 in May, down 3.5% from the previous month, and 5.7% below the same period last year. This represents three consecutive months of negative returns, and the largest one-month drop since the inception of the index. Nonetheless, the CPPI still logs an increase of 3.9% over a two-year time period. Moody’s also noted that the average transaction price is steadily falling as transaction activity continues to shift to lower priced assets.
- Colliers Meredith & Grew: The most active (commercial real estate) capital providers continue to be life companies and local/regional commercial banks. The few conduit lenders that have shored up their balance sheets and re-entered the market are, for the most part, significantly wider on pricing at this time. Lenders are increasingly seeking to participate in syndicated loan opportunities, common for large loans ($50M+), as a means to mitigate credit risk and manage exposure on smaller loans.
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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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