Cushman: Capital Flowing Into Real Estate

All is not exactly lost for the real estate market, according to Cushman & Wakefield Sonnenblick Goldman. In a capital markets update on Wednesday, the firm reports that there is capital coming into real estate, with lenders and equity investors reporting greater desire and capacity to put money to work.

March 11, 2010
By Allison Landa, News Editor

Courtesy Flickr Creative Commons user laRuth

All is not exactly lost for the real estate market, according to Cushman & Wakefield Sonnenblick Goldman. In a capital markets update on Wednesday, the firm reports that there is capital coming into real estate, with lenders and equity investors reporting greater desire and capacity to put money to work.

“Talk of a ‘liquidity bubble’ may be overdone, as capital providers are still very focused on strong sponsors and major markets, but liquidity is certainly having a strong impact on certain markets and assets,” the report reads.

Cushman also found that mezzanine lending spreads are starting to improve after nearly 24 months of subordinate debt quotes in the range of 16 to 22 percent, with several new funds coming into the market. The report also found that spreads have come in nearly 25 basis points during the past two weeks, with 10-year, Super-senior AAA bonds tightening to 430 basis points over the Treasury.

“The nearly continuous rally in AAA spreads over the past three months is being reflected in the enthusiasm of lenders for conduit loan product,” it reads. “Look for the first large multi-sponsor securitization involving assets other than multi-family in the next 6-8 weeks. Every major bank is either formally back in the market underwriting deals or is in the process of hiring loan origination professionals.”