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
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.