Apartment Rates | Ashworth Partners

Apartment Building Investment Loan Rate Trends Lower as 10yr Treasury and Spread Fall.

The apartment building investment loan rate we track continued to trend downward as both the 10yr Treasury (T10) and the spread between the two came in during April. Today’s new rate on the loan is 4.733%, a 212 basis point spread over the T10 which was in the 2.61% area today. The six month moving average spread continues to fall suggesting that lenders are more confident and/or aggressive but the spread itself is above the March 17 low of 209bp.

This month we add a new rate which the ULI (Urban Land Institute) reports on from the Trepp survey. According to the ULI the Trepp rate is what large institutional borrowers could expect to pay on a 10 year fixed rate, less than 60% LTV loan for a “crème de la crème” core apartment property located in a gateway market. We track this rate as a barometer of what the largest lenders are offering their best customers on the most secure loans for any advanced warning about future rate and spread changes. See the ULI<60LTV Rate on the chart below (in gold). Note that the spread we chart is between 10yr loan we track (in orange) and the T10 (in blue):

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Building Investment Loan Rate Trends Lower as 10yr Treasury and Spread Fall.

Apartment Loan Rate Stays Below 5% For 10th Week

The apartment investment loan we tract (see below for details) clocked in at 4.861% this week making it the 10th week in a row below 5%. Meanwhile the spread between it and the benchmark 10 year Treasury (T10) held in the 210 -220 basis point range over the last six weeks. The T10 itself had been in the 2.7% range over the last month but dipped to 2.65% this week:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Loan Rate Stays Below 5% For 10th Week

Apartment Loan Rate Falls To Nine Month Low of 4.743%

After spending just one week above its six month moving average the spread between the apartment investment loan rate we track and the 10 year Treasury (T10) fell to 2.143 with the apartment loan rate at a nine month low of 4.743%. Meanwhile the T10 bounced up to 2.8%, climbing 20bp in the past week:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that we have more than a year’s worth of data Continue reading Apartment Loan Rate Falls To Nine Month Low of 4.743%

Apartment Investment Loan Rates Drift Lower But Spread Widens

Over the last month the apartment loan rate we track eased slightly from 5.17% to just under 5 at 4.959% as the 10 year Treasury continued to fall causing the spread to rise above its 6 month average for the first time since July of last year but remains tighter than a year ago:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Investment Loan Rates Drift Lower But Spread Widens

Apartment Loan Rate Rises Faster than Treasuries as Spread Widens

Happy New Year everyone. Loan rates from the lender we track have risen over the last few weeks as the ten year Treasury (T10) has climbed about 25 basis points (bp) and the spread between the two has widened about 10 basis points. At 221bp though it remains tighter than a year ago when it ranged in the 270bp area.

Apartment Building Investment Loan Rate and 10yr Treasury Spread — Click on Image for full size.

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Loan Rate Rises Faster than Treasuries as Spread Widens

Good News on Latest 10yr Treasury, Apartment Building Loan Rates and Spread Chart

In more good news for apartment building investors, both the 10 year Treasury and apartment loan rates have moderated since the Fed’s “non-taper” announcement in mid-September. The spread between the T10 and the 10 year apartment loan rate we track has come in as well. Since 9/16 the Treasury has drifted down from 2.88% to yesterday’s quote of 2.53% while the loan rate has moved from 5.282 down to 4.921, bringing the spread in to 2.381 from 2.402. The average spread for 2013 has also narrowed to 2.573%:

Notes about the apartment Continue reading Good News on Latest 10yr Treasury, Apartment Building Loan Rates and Spread Chart

Multifamily Loan Rates Moderate Then Dip, Good For Apartment Building Investors.

10 year apartment building loan rates had been in a range the last few weeks until Ben Bernanke ‘failed to taper’ last Wednesday causing the bellwether 10 Year Treasury to fall about a dozen basis points to today’s quote of 2.72%. This is good news for apartment building investors, home buyers and builders, stock market speculators, just about everyone except savers, retirees and the people running retirement plans. The upside is that loan rates may head lower but the downside is the economy and particularly employment haven’t improved enough to ease off the money printing pedal.

Here’s the latest chart showing the T10, the 10 year fixed apartment rate we track and the spread between the two:

This week’s quote for a 10 year fixed rate, 30 year amortization apartment loan is 5.131%. (See below for more detail on this loan). The other thing noticeable on the chart is that the spread between the rates has been below the yearly average consistently since the beginning of July. In fact the average spread has fallen to 2.602 from 2.661 over that period. Partly because 4.5% was about as low apartment rates were going to go no matter how far down Treasuries went but also I think that lenders are getting more aggressive, especially in the multifamily sector.

Continue reading Multifamily Loan Rates Moderate Then Dip, Good For Apartment Building Investors.

Apartment Building Loan Rates Rise as 10yr Treasury jumps 31bp in Ten Days

After two weeks of holding at 5.068% the apartment loan rate we track rose to 5.274%, pushed higher by the 10yr Treasury moving up 31 basis points in the last week and a half. The spread between the two remained below the 2013 average of 2.628, coming in at 2.394:

This means that the monthly payment on a $1,000,000 apartment building investment loan with 30 year amortization would rise from Continue reading Apartment Building Loan Rates Rise as 10yr Treasury jumps 31bp in Ten Days

10yr fixed apartment loan rate remains below 5.1% as 10yr Treasury ranges in 2.6-2.7% area

The rate on the 10yr fixed (30yr amortization) apartment building loan we track stayed in the 5.0-5.1% range for the second week while the spread to the 10yr Treasury remained in the 240 area, still lower than the 2013 average of 264:

The narrower spread makes sense in light of the July Senior Loan Officer Opinion Survey on Bank Lending that reported loosening lending standards for commercial real estate loans (including apartments) even as loan demand picked up: Continue reading 10yr fixed apartment loan rate remains below 5.1% as 10yr Treasury ranges in 2.6-2.7% area

10yr Treasury back in 2.6% range bringing apartment loan rates up. The spread also widened but remained below 2013 average.

Quick update: The 10 year Treasury (T10) climbed back up into the 2.60% range while the 10 year fixed apartment building loan we track moved up to 5.033%. The spread between them widened to 242bp but remains below the 2013 average of 265bp. This week we’ve added the darker green line to show the average spread between the T10 and the apartment rate on the chart. Note that it uses the Right Hand Scale along with the spread itself:

10 year Treasury rate vs 10 year fixed apartment building investment loan July 2013 — 10yr Treasury Rate via St. Louis Fed’s FRED data, contact us about the apartment loan rate and details: www.ashworthpartners.com

For details on the apartment loan we track see the notes in last week’s post here: Apartment Building Loan Rates Fall as Spreads Narrow.

How the St. Louis Fed calculates the 10 year Treasury rate displayed above: “Treasury Yield Curve Rates. These rates are Continue reading 10yr Treasury back in 2.6% range bringing apartment loan rates up. The spread also widened but remained below 2013 average.