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The Real Estate Capital Scoreboard – Special Bulletin


Chicago, Illinois -- November 13th, 2007 -- Last week the commercial mortgage-backed securities market witnessed a major price correction. Wall Street’s onslaught of disappointing earnings reports from major investment banks and money-center institutions sent shock waves to all corners of the capital markets.

As a result, The Real Estate Capital Institute® has issued a special bulletin to reflect these dramatic changes with the key highlights as follows:

• Since mid-year, AAA spreads increased more than a half a percent, largest widening since the summer of 1998.
• Earlier in the month commercial mortgage-backed securities appeared to stabilize as relatively solid income-property supply/demand dynamics prevailed. In contrast, the residential subprime problems seemed more remote from the commercial sector.
• Given the rapid changes in the marketplace during the past few days, numerous lenders have temporarily suspended locking rates until more stability returns to the real estate capital markets. New loans are prices very selectively.
• As for the permanent fixed-rate mortgage market, overall mortgage spreads of 140 to 220 basis points over comparable-term treasuries are now less certain. This week, expect lenders to re-price their spreads by at least 15 basis points or more.

Nat Zvislo, Research Director of the Institute observes, “The markets are unsettled as lenders have difficulty in trying to accurately price their debt instruments.”


The Real Estate Capital Institute® is a volunteer-based research organization tracking realty rates data for debt and equity yields. The Institute posts daily and historical benchmark rates including treasuries, bank prime and LIBOR. Furthermore, call the Real Estate Capital RateLine at 7RE-CAPITAL (773-227-4825) for hourly rate updates.


 mortgage debt equity
 realty finance
 libor prime spreads rates

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