 |
| Jeanne Peck |
Chicago, IL – Real Estate
Capital Institute reports recent treasury rate and mortgage
spread spikes show a
combination of capital market uncertainty on monetary
policy issues, the
election and overall investor fatigue.
Yields are
globally rising as
investors reevaluate how much longer current monetary
programs will work for
controlling economic stimulus. Pricing
translates to
at least a quarter higher
than a month ago. In fact, treasuries jumped to
the highest level since
May. Emerging commercial mortgage
pricing trends
include:
Stubborn Rates: Bond markets flattening out. Evidence mounts for
policymakers to stay
within the neutral zone, at least for the short term.
While inflationary
pressures overshadow the American economy, latest figures
favor key cost indicators
staying in check. Global markets still
stymied by
lackluster performance,
keeping domestic rates tamed. Current
yields, for
the most part, factor in
at least one quarter-point rate hike.
Risk Retention
Ignited: This month Wall Street issued a
considerable new
batch of conduit
loans. Issuers continue to shuffle
pipelines ahead of
impending risk retention
regulations taking effect on December 24, 2016.
After maintaining a steady
rally over the past six months, new issue spreads
have begun to drift
slightly wider. With stringent loan loss
requirements,
smaller conduits exiting
the markets, in favor of larger financial
institutions that can
absorb risk. The net effect equates to
about 15 bps
widening since September.
Agencies Active: Freddie and Fannie are managing their caps
well and are
still actively lending on
multifamily assets. Both Agencies have released
competing green programs
that offer significant benefits in rate and
proceeds should the
property qualify. These programs can reduce interest
rates by up to 40
bps.
Forward Planning: With more flexible [balance-sheet] internal
allocation
goals, based compared to
other permanent lenders sources, LifeCos budgeting
funds for 2017. Key areas
of competition include lower rates and
forward-rate locks of up
to one year.
The Real Estate Capital
Institute's director, Jeanne Peck,
boasts "It's a
double header ball game
- as the current economic recovery rolls
along, at
least for another year or
so. Simply too much capital in the
system.
Expect more of the same
market behavior, regardless of who takes the White
House."
For a complete copy of the
company’s news release, please contact:
Jeanne Peck, Executive
Director, director@reci.com
No comments:
Post a Comment