The latest numbers

ULI has some numbers for us to digest from a variety of sources. The highlights:

A prediction of a 40% decline in volume in commercial property sales in 2008 compared to 2007. Not a huge surprise as the megadeals are largely off the table and you are going back to more single-asset transactions. And the formerly hot areas are not so not any more. Take Las Vegas, Florida, etc. The bargains may be had in some markets, but not all.

Big declines in short-term Treasuries; less so in the long term ones that influence rates. Pricings that will allow lenders to make real money if the tranches are rated correctly. The lower-tranche spreads are amazing. Some indicated spreads are going back to something that, in my opinion, might make some sense, although with a lower LTV than you had before. Bring in that equity, mezz debt or whatever you need to get the deal done.

The interesting thing I see out of this is that, slowly, things seem to be working out. I had been seeing a lot of LIBOR + 300s quoted (even with great credit and low LTV!) and but I think that may start coming back down a little. Yes, lenders have tightened credit and I still say that is not a bad thing; it may be a little too tight right now but that should all work out in a quarter or two.

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