See GRAPEVINE on Back Page

THE GRAPEVINE

MAY 18, 2012 12 REIT CREDIT RATINGS

14 LARGE LOANS IN SPECIAL SERVICING

3 Principal, Canada Pension Snag Mezz

3 CIBC, Blackstone Turn to JP Morgan

3 Capital One, JP Morgan Win Big Loan

4 JP Morgan to Back Ex-Lembi Rentals

6 Invesco Seeks Loan for Safeway Deal

6 Fund Shop Writes Chicago, NY Loans

7 Confab Focus: New Rules, Bad Debt

7 CRE Finance Council Names Officers

8 Guggenheim Adds Four Executives

8 Eightfold Snags Another B-Piece

9 Capstone, KABR Scoop Up Sour Debt

10 Huntington Shops Fla. Apartment Debt

10 CBRE Inks Colo., Texas Freddie Loans

10 Blackstone Funds Mezz for Normandy

10 Beech Street Lines Up Fannie Loans

Cantor Fitzgerald hired Edward Petti this week as a managing director on its origination team in New York. Petti previously was an executive director with Ladder Capital, originating bridge loans and mortgages for the New York firm’s commercial MBS program. He’ll work on the same kinds of deals at Cantor, with a focus on fixed-rate loans. He reports to Anthony Orso, chief executive of Cantor Commercial Real Estate. Petti had previ-ous stints at Arbor Commercial Mortgage of Uniondale, N.Y., and Credit Suisse.

Timothy Hallock joined Bancorp Bank last week as a managing director of

CMBS Shops Eye Loan on GGP’s Vegas MallsGeneral Growth Properties is on the prowl for $650 million of debt on two shop-

ping centers on the Las Vegas Strip.The collateral is the Grand Canal Shoppes at the Venetian and the Shoppes at

the Palazzo, which are connected by pedestrian walkways. The properties, which encompass 768,000 square feet, currently have separate loans.

The early buzz is that the assignment is likely to end up in the securitization market. While commercial MBS lenders have had difficulty competing with life companies recently for large loans on high-end malls, the size and the specific nature of the collateral make it more suitable for securitization platforms, lenders said.

The Chicago REIT, which is being advised by Eastdil Secured, prefers a mortgage with a term of 5-7 years and will consider fixed- and floating-rate proposals.

The 498,000-sf Grand Canal Shoppes is inside the Venetian casino. The Venice-themed mall has 80 shops and restaurants, but no anchor stores. Tenants include

See VEGAS on Page 8

Financial Jitters Send CMBS Spreads WiderVolatile market conditions and other factors prompted commercial MBS buyers

to demand higher yields than expected on two multi-borrower offerings this week, forcing new-issue spreads wider than they had been all year.

The benchmark super-senior class of a $1.6 billion conduit issue by Jefferies LoanCore, Goldman Sachs, Citigroup and Archetype Mortgage Capital was being shopped yesterday at 130-135 bp over swaps. That was up from earlier price talk of 120-125 bp and from the 120-bp issuance spread on equivalent 10-year bonds in the previous multi-borrower issue, on April 24. By late yesterday, the dealers had lined up buyers for about 70% of the $673.9 million tranche. The transaction was expected to price today.

A $933 million conduit offering by Cantor Fitzgerald and Deutsche Bank is expected to price soon after the Jefferies deal, at similar spreads. That deal’s $409.2

See JITTERS on Page 11

Tishman to Buy SF Tower, Seeks FinancingTishman Speyer has agreed to buy the office building at 650 California Street in

San Francisco and is shopping for $130 million of financing.New York-based Tishman is acquiring the property from investment manager

AEW Capital of Boston. Lenders said the loan-to-value ratio on the proposed mort-gage would be about 60%, indicating that the purchase price is roughly $220 mil-lion.

Tishman is seeking a fixed-rate loan with a term of 7-10 years. Eastdil Secured, which is brokering the sale for AEW, is also advising Tishman on the loan. It is showing the assignment mainly to insurers and other portfolio lenders.

The 492,000-square-foot building, between Kearny Street and Grant Avenue, is regarded as one of San Francisco’s top-tier office properties. Its occupancy rate is 92%. Tenants include law firm Littler Mendelson (111,000 sf until 2016), Credit Suisse (62,000 sf until 2020) and advertising agency Goodby Silverstein (51,000 sf

See TISHMAN on Page 8

Atlantic | Pacific Companies: Founder Alan Cohen, Executive Vice President Stanley Cohen, CFO Ken Cohen, CEO Howard Cohen

Commercial Real Estate

At Wells Fargo, we build strong relationships with commercial real estate companies like

Atlantic | Pacific Companies. A | P Companies purchases, develops, leases and manages

residential and commercial properties throughout the United States. Because we offer

the full spectrum of commercial real estate services — including lending, capital markets,

and advisory services — we’ve been able to help Atlantic | Pacific Companies succeed

through all economic cycles. To learn how your real estate company can benefit from

working with the largest and most experienced commercial real estate lender in the

industry, go to wellsfargo.com/realestate.

With you whenthe strength of your relationship counts

Atlantic | Pacific CompaniesCustomer since: 2003Services provided:— Construction and bridge financing

— GSE loan origination

— Equity and mezzanine capital

— Interest rate risk management

— Treasury management1

— Wealth management

— Insurance2

© 2012 Wells Fargo and Company 1 Member FDIC. 2 Insurance products are offered through non-bank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies, with the exception of crop and flood insurance. Crop and flood insurance may be underwritten by Wells Fargo Insurance Services’ affiliate, Rural Community Insurance Company. Banking and insurance decisions are made independently and do not influence each other. MC-4025

MC-4025 RE Alert_Atlantic_Pacific_WYW_ad_8x10.indd 1 4/11/12 11:45 AM

May 18, 2012 Commercial Mortgage ALERT 3

Principal, Canada Pension Snag MezzPrincipal Real Estate and Canada Pension Plan have funded

$80 million of mezzanine debt on the Walden Galleria mall in suburban Buffalo.

The debt is the junior portion of a $350 million financing package that J.P. Morgan arranged for the mall’s owner, Pyramid Cos. of Syracuse, N.Y. The bank is securitizing the senior $270 million portion via a stand-alone commercial MBS offering that is expected to price today (see article on Page 1).

Principal, an investment manager in Des Moines, Iowa, took down $30 million of senior mezzanine debt. Toronto-based Canada Pension, a defined-benefit plan that provides pension, disability and survivor benefits to Canadian residents, funded the $50 million junior mezzanine piece.

The fixed-rate debt package, which closed on April 26, has a 10-year term. The coupon on the senior portion is 4.88%. The mezzanine debt has a weighted average interest rate of 5.875%.

J.P. Morgan’s decision to securitize the senior portion in a single-asset transaction took many in the market by surprise. The bank was expected to break the loan into pieces and include them in two or more multi-borrower transactions.

It’s unclear why the bank might have changed course. But rival lenders said that if J.P. Morgan wrote the loan with the expectation of securitizing it via multi-borrower transactions, it may now take a hit. That’s because single-borrower paper typically commands lower prices. What’s more, the size of the senior portion is at the low end of the range at which single-asset transactions are economical.

The debt package is backed by 1.2 million square feet of the 1.6 million-sf mall, which is in Cheektowaga, N.Y. The stores of anchor tenants Macy’s and Lord & Taylor are separately owned and aren’t part of the collateral. The other anchors are Sears and JC Penney. The collateral space, which was appraised at $600 million, is 87.4% occupied. The in-line space has average sales of $580/sf.

Pyramid used $291 million of the J.P. Morgan loan to retire a maturing debt package. Eurohypo securitized the senior $232 million portion via a $1.6 billion floating-rate deal in 2007 (J.P. Morgan Chase Commercial Mortgage Securities Corp., 2007-FL1).

This is the second time this year that Pyramid is tapping Canada Pension for mezzanine financing. Earlier, the Cana-dian institution provided the $145 million senior mezzanine portion of a $420 million floating-rate debt package that J.P. Morgan arranged on the Carousel Center/Destiny USA retail complex in Syracuse.

CIBC, Blackstone Turn to JP MorganCIBC World Markets and Blackstone have tapped J.P. Morgan

to underwrite the securitization of $750 million of commercial mortgages that they originated via a joint venture.

Blackstone will retain the junior classes of the long-awaited securitization, which is expected to hit the market in June.

CIBC and Blackstone formed the joint venture, called CIBX, in late 2010. It was capitalized with $125 million of equity and $625 million of debt. CIBC provided the debt in the form of a warehouse line, while both firms kicked in equity. CIBC and Blackstone are equal partners in managing the operation, but loan underwriting is overseen by CIBC.

The CIBC deal will be part of a busy June lineup of multi-borrower offerings. Also on tap for that month are a $1.5 billion deal by Deutsche Bank, Ladder Capital and Guggenheim Part-ners, a $1.4 billion issue by Wells Fargo and RBS, a $1.3 billion transaction by J.P. Morgan and a $1.4 billion offering by UBS, Barclays, Archetype Mortgage Capital and KeyBank.

Meanwhile, a $1 billion deal by Morgan Stanley and Bank of America that was previously expected in June now is on track to hit the market in July.

Capital One, JP Morgan Win Big LoanCapital One and J.P. Morgan have agreed to provide about

$135 million of financing for Starwood Capital’s pending pur-chase of the leasehold interest in the office building at 1372 Broadway in Midtown Manhattan.

The floating-rate loan is structured as $110 million of senior debt and a $25 million mezzanine piece.

The two banks will evenly divide the senior portion, which has a three-year term and two one-year extension options. The junior debt will evidently be placed with one or more high-yield investors.

The duo beat out several other banks for the assignment, including New York Community Bank, which was also a finalist.

Starwood, a fund shop in Greenwich, Conn., is buying the leasehold interest from a Lloyd Goldman partnership for about $185 million. New York Life has agreed to purchase the ground beneath the 572,000-square-foot building for an unspecified price. Starwood will sign a 99-year ground lease.

The seller’s partners include David Werner, another New York investor. The group acquired the building in 2008 from a partnership between Wachovia and New York-based SL Green for $294 million. Wachovia had bought its majority stake the previous year in a deal that valued the building substantially higher, at $335 million.

The Goldman-Werner team presumably took the unusual step of selling the ownership of the building and land sepa-rately because that produced the highest price.

The 21-story property is between West 37th and West 38th Streets, five blocks south of Times Square. It was fully reno-vated in 1999 and is nearly fully leased.

Researching a Deal? Use Commercial Mortgage Alert’s CMBS Database to zero in on any issue backed by commercial and multi-family properties. This powerful research tool — complete with pricing details on thousands of issues — is FREE at CMAlert.com if you’re a subscriber to Commercial Mortgage Alert.

JP Morgan to Back Ex-Lembi RentalsJ.P. Morgan has agreed to write $105 million of long-term

loans for an investment group that is seeking to seize a portfo-lio of San Francisco apartment properties owned by the Lembi family, one of that city’s biggest landlords.

The borrower, a joint venture between local operator Veritas Investments and an unidentified institutional investor, would use the proceeds to recapitalize the 437-unit portfolio. The Veritas team holds mezzanine debt on the properties and has moved to foreclose. Last year, Veritas acquired a separate port-

folio that had been surrendered by the Lembis.J.P. Morgan would write individual mortgages on the 14

properties via its “commercial term lending program.” It’s unclear if the bank plans to sell the loans to a federal mortgage agency.

The portfolio consists of garden-style complexes and mid-rise properties. Among them is a 70-unit property at 645 Stockton Street in the Nob Hill district, across from the Ritz-Carlton hotel, a 33-unit property at 2677 Larkin Street and a 35-unit property at 1340-1390 Taylor Street. The portfolio was 82% occupied as of September 2011, according to the most-

recent data available in a servicer report.

The Lembi family lined up a $103.3 million interest-only debt package on the portfolio in 2007 from UBS. The bank securitized the senior $73.6 million piece via a $3.6 billion pooled offering (LB-UBS Commercial Mortgage Trust, 2007-C2). The remaining $29.7 million of the five-year, fixed-rate debt package was structured as mezzanine debt.

The Lembi family failed to pay off the debt when it matured in March. The Veritas partnership, which is being advised by Eastdil Secured, will use some of the proceeds from the J.P. Morgan loan to retire the securitized portion.

Last year, Veritas, which is headed by Yat-Pang Au, acquired eight San Francisco apartment properties that the Lembi family had surrendered in bankruptcy proceedings. Veritas financed the $55 million acquisition with a $39 million fixed-rate loan from Capital Source. The properties, with 346 total units, were in the Nob Hill, Alamo Square, Upper Market and Civic Center sub-markets. HFF arranged that five-year loan.

May 18, 2012 Commercial Mortgage ALERT 4

Subject to Auction Terms and Conditions. Auction.com, LLC, 1 Mauchly, Irvine, CA 92618 (800) 499-6199. AUC024-04-104950-1

www.auction.com/commercial

The nation’s leading online real estate marketplace.

UPCOMING OPPORTUNITIES TO QUICKLY SELL YOUR COMMERCIAL ASSETS.

Date Auction Assets Committed to Date

July 16 - 18 30+ States $300+ Million in Assets

July 23 - 25 Multi-Family $300+ Million in Assets

July 24 - 26 Hospitality $300+ Million in Assets

August 6 - 8 Office & Retail $350+ Million in Assets

August 13 - 15 35+ States $350+ Million in Assets

Hurry! Submission deadlines are quickly approaching.

Maximize your recoveries. Choose one of our upcoming auctions, then contact us to be included.

For a complimentary portfolio evaluation, contact Ken.Rivkin@auction.com.

Drill down deep into our market statistics. Go to The Marketplace section of CMAlert.com and click on “CMBS Market Statistics,” which lets you see the data points behind all the charts that Commercial Mortgage Alert publishes each week. It’s free.

Moving with confidence in the real estate capital markets.

Global Capital Markets

In 2007, Cushman & Wakefield joined forces with Sonnenblick Goldman, a leader in real estate financial services, to create Cushman & Wakefield Sonnenblick Goldman. Together we have offered clients a coordinated global approach to making the

most informed investment and finance decisions. Now five years later, with a combined expertise spanning more than 200 years, Cushman & Wakefield Sonnenblick Goldman will now be known as...

Cushman & Wakefield

Invesco Seeks Loan for Safeway DealInvesco Real Estate is hunting for $100 million of debt to

finance its acquisition of four shopping centers in California and Hawaii.

The investment shop acquired the properties for $198.8 mil-lion in two stages in recent months from supermarket chain Safeway, which leased back much of the space.

Invesco prefers a fixed-rate loan with a term of 7-10 years. The Dallas investment manager is pitching the lending assign-ment solely to insurance companies via Eastdil Secured, which also brokered the portfolio sale.

The 283,000-square-foot portfolio, which attracted intense interest from investors, was one of the highest-quality packages of grocery-anchored shopping centers to hit the block in years. The properties, which were built or re-modeled in the past four years, are 97.8% occupied.

The anchor Safeway stores, which account for 80% of the space, are top performers for the chain. Within three miles of each center, the average population is 151,000 and the average household income is $103,000.

The Pleasanton, Calif., grocery chain signed a 20-year lease on each store. Safeway operates 1,700 stores nationwide with a combined $41 billion of sales.

Invesco acquired three of the properties in December for $149.7 million:•The 79,000-sf Safeway Kapahulu, at 888 Kapahulu Avenue

in Honolulu. Occupancy rate: 100%. Built: 2007.•The 70,000-sf Safeway Burlingame, at 1450 Howard Avenue

in Burlingame, Calif. Occupancy rate: 92.8%. Built: 2011.•The 65,000-sf Shamrock Plaza, at 7499 Dublin Boulevard

in Dublin, Calif. Occupancy rate: 100%. Built: 2001. Reno-vated: 2007.

In March, Invesco closed on the $49.1 million acquisition of the 70,000-sf Pavilions Marketplace in West Hollywood, Calif. That property, at 8969 Santa Monica Boulevard, was built in 2009. Its occupancy rate is 98.3%. The anchor is Pavilions, Safe-way’s upscale brand.

Fund Shop Writes Chicago, NY LoansPrime Finance has originated two floating-rate mortgages

totaling $202 million on commercial properties in Chicago and Midtown Manhattan.

The New York fund shop closed both loans within the past two weeks. Each has a three-year term and two one-year exten-sion options.

The larger loan, for $145 million, went to a joint venture that’s working to stabilize a mixed-use development in Chicago called Roosevelt Collection. The property has 342 luxury apart-ments that are nearly fully occupied and 400,000 square feet of retail space that is mostly vacant, plus a 1,500-space garage.

McCaffery Interests of Chicago and Los Angeles fund shop Canyon Capital Realty took over the property in March 2011, after buying its $285 million debt package from Bank of Amer-ica for $160 million, or 56 cents on the dollar. The previous owner, a partnership between fund shop Angelo, Gordon & Co. of New York and Centrum Properties of Chicago, then surren-dered the keys.

The McCaffery-Canyon partnership will use some of the loan proceeds to reposition and lease up the retail space. The debt was arranged by HFF. Markets players previously said the joint venture planned to pump in roughly $70 million of addi-tional equity.

In New York, Prime wrote a $57 million mortgage to refi-nance a 230-room hotel, Club Quarters Rockefeller Center, at 25 West 51st Street. The borrower is Rockwood Capital, a New York fund operator. Jones Lang LaSalle Hotels brokered the financing. The property includes the Terrace Club, a private restaurant and networking club on the building’s seventh floor, and ground-floor retail space.

CorrectionA May 11 article, “Morgan Stanley Syndicating Normandy Floater,” misidentified the collateral for a $110 million senior mortgage that Morgan Stanley originated for Normandy Real Estate Partners. The loan, which closed this week, is backed by a 787,000-square-foot portfolio of office buildings in Northern Virginia and Columbia, Md. It wasn’t used to refinance a 1.1 million-sf portfolio of office and industrial buildings in Mas-sachusetts and New Jersey that are owned by a Normandy part-nership. (See article on Page 10.)

May 18, 2012 Commercial Mortgage ALERT 6

NOTICE OF PUBLIC SALE OF COLLATERAL Please take notice that 100% of the membership interests in 2279-2283 Third Avenue Associates LLC, a New York limited

in that certain First Amended and Restated Ownership Interests Pledge and Security Agreement (the “Security Agreement”), dated April 3, 2009, by and between 2279-2283 Third Avenue Development LLC (“Debtor”) and HSBC Capital (USA) Inc. on behalf of HSBC Real Estate Mezzanine Partners USA, L.P. (“Original Lender”), which Security Agreement and obligations secured thereby were subsequently assigned to LCP-GC LLC (“Secured Party”) and all proceeds of any of Collateral (all such assets, the “Collateral”) will be offered for sale at a public auction by Secured Party as secured party and sold to the highest on June 7, 2012 at

10112. This sale is held to enforce the rights of the Secured Party under the Security Agreement. The Secured Party reserves the

below) and terminate or adjourn the sale to another time, without further publication. Interested parties who would like additional information regarding the Collateral and the terms and conditions of the Sale (the “Terms and Conditions”) should visit the website www.perkinscoie.com/thirdavenuedevelopmentsecuredpartysale (the “Website”). Secured Party reserves the right to post additional terms and conditions to the Website. For further information contact counsel for Secured Party, Perkins Coie LLP, 30 Rockefeller Plaza, 25th Floor, New York, New York, 10112, Attn: Gary F. Eisenberg, Esq., at 212-262-6902 or by email at geisenberg@perkinscoie.com.

Confab Focus: New Rules, Bad DebtRegulatory issues and strategies for dealing with distressed

debt will take center stage next month when about 1,000 real estate finance professionals converge on the nation’s capital.

About 650 market participants have already signed up for the CRE Finance Council’s midyear conference, to be held June 11-13 at the JW Marriott Hotel in Washington. That puts atten-dance on track to meet or exceed last year’s tally of 1,010.

The annual confab has traditionally been held in New York. The change in venue reflects the major role in finance that the federal government has played since the credit crunch. The council’s other big annual conference, held in January, returned to its longtime home in Miami Beach this year after being held in Washington in 2010 and 2011.

Next month’s event will enable attendees to interact with regulators, who have been invited to attend for free, said Stephen Renna, the trade group’s chief executive. Among the speakers will be bank regulator Thomas Curry, who was sworn in last month as Comptroller of the Currency.

While the commercial-mortgage industry faces a wave of legislative and regulatory reforms, the issue of top concern is risk-retention require-ments for securitizations mandated by the Dodd-Frank Act. More than a year ago, the comptroller’s office and five other fed-eral regulators unveiled a detailed plan for implementing those requirements, but received strong pushback from the indus-try during the public-comment period. The agencies have repeatedly indicated they’d like to finalize the rules this year and have them take effect for commercial MBS two years later. But many mortgage pros are urg-ing amendments and another round of pub-lic comment.

The lending outlooks for both CMBS pro-grams and portfolio shops is likely to domi-nate panel discussions and cocktail-party chatter. There also figures to be a heightened focus on investments in distressed commer-cial mortgages, including workout strategies, said Renna, who noted that recent council-sponsored events on distressed debt drew strong turnouts in New York and Santa Mon-ica, Calif.

After the credit crunch took hold four years ago, scores of high-yield investors raised capital to scoop up bad loans at steep discounts. But many banks and other lenders refused to dump loans at fire-sale prices, in some cases because they didn’t have enough capital to absorb the losses. “Now, a lot of the banks’ balance sheets have improved,” Renna said. “They’re seeing what loans have recovered and what have not.” That, in turn,

is “leading to better workouts and more clarity in strategy,” he added. “That’s what everybody has been waiting for, and they want to talk about it.”

Meanwhile, the council has revised its conference agenda this year as part of its ongoing effort to broaden its appeal to all types of real estate finance pros, not just those involved with securitization. Instead of holding a single series of panel dis-cussions, sometimes there will be two running concurrently, with no more than one focusing on CMBS-related issues.

One session will focus on the global impact of the European debt crisis, as well as its effect on the U.S. commercial real estate market. Another will feature a panel of senior managers from the CMBS groups at all six rating agencies that grade deals in the sector. “They’ve been off the stage for a while,” Renna said, referring to previous conferences. “It’s time for stress-testing the rating agencies.”

The conference admission fees match those for the January gathering in Miami: $1,350 for council members and $1,950 for non-members until June 1. After that, the fee to register at the door will be $1,450 for members and $2,150 for non-members.

May 18, 2012 Commercial Mortgage ALERT 7

CRE Finance Council Names OfficersThe CRE Finance Council has lined up its officers for the next year.The trade group’s board of governors has chosen Keith Gollenberg of

Oaktree Capital as its next president-elect. In June 2013, he will succeed Citigroup’s Paul Vanderslice, who begins a one-year term as president next month.

The board has appointed three other industry veterans to one-year terms as officers on its executive committee, and re-appointed two others. They and Gollenberg will take their posts during the organization’s annual mid-year conference, June 11-13 at the JW Marriott Hotel in Washington.

Gollenberg is a managing director on Oaktree’s commercial real estate invest-ment team in New York. He will join Vanderslice, Citi’s co-head of commercial MBS in the U.S., and outgoing president Jack Cohen, chief executive of Cohen Financial, as leaders of the trade group’s 11-member executive committee.

The new vice president will be Tim Gallagher, a managing director at Morgan Stanley who oversees trading of commercial real estate debt. He’ll replace Warren Friend, a managing director at BlackRock’s risk advisory arm, BlackRock Solutions.

The other incoming executive officers are secretary Kathleen Olin, a vice president at CWCapital in Washington, and policy-committee chairman John D’Amico, the former general counsel of servicer Centerline Capital.

The returning officers are treasurer Dan Bober, an executive vice president in the commercial-mortgage servicing area at Wells Fargo, and membership chair-man Brian Olasov, a managing director at law firm McKenna Long in Atlanta.

Gollenberg, Gallagher and Olin will join the executive committee when they take office next month. D’Amico has served the last year as an at-large member. Vanderslice will soon appoint three at-large members to be ratified by the board of governors.

The executive committee advises the council’s governing board, which consists of about 60 members and meets four times a year. The council’s full-time chief executive, Stephen Renna, works closely with the committee.

Guggenheim Adds Four ExecutivesGuggenheim Partners recruited four staffers this month for

its real estate finance team, which is led by Rob Brennan.Ted King will start next week in the Atlanta office as a

managing director. He will oversee servicing and asset management for Guggenheim Commercial Real Estate Finance and for Pillar Multifamily, the Fannie Mae lending shop that Guggenheim controls. King was previously a director at ING Investment Management. At Guggenheim, he reports to Michelle Paretti, chief operating officer of the real estate finance group.

Meanwhile, two originators have joined the group in New York. John Barker started this week and Jonathan Greenhouse came aboard last week as managing directors, responsible for originating and sourcing commercial real estate loans for Gug-genheim’s portfolio, for its clients and for securitization. They report to origination co-heads Rob Russell and Kieran Quinn. Barker was previously a director at Arbor Commercial Mort-gage, and Greenhouse was an executive director at CIBC World Markets.

Shawn Conover joined two weeks ago as a vice president for loan underwriting. He was previously a vice president at Fund Core Finance.

Eightfold Snags Another B-PieceEightfold Real Estate Capital has circled its second B-piece.The Miami firm, launched this year by a handful of former

LNR Property executives, has agreed to buy the subordinate classes of a $1.5 billion commercial MBS deal that Deutsche Bank, Ladder Capital and Guggenheim Partners are expected to launch in June.

Eightfold previously circled the junior classes of a $932.8 million offering by Deutsche and Cantor Fitzgerald. That trans-action was on track to price this week.

Eightfold, backed by Boston hedge fund operator Abrams Capital, also invests in B-notes and mezzanine debt, and pro-vides rescue capital to distressed borrowers.

Vegas ... From Page 1

Sephora, Wolfgang Puck’s Postrio Bar & Grill and Madame Tus-saud’s Wax Museum. The mall had $50 million of net operating income last year, up from $46.6 million in 2010.

The Grand Canal Shoppes currently has a $368.1 million mortgage that Goldman Sachs originated in 2004 and secu-ritized via two pooled transactions (GS Mortgage Securities Corp. II, 2004-GG2, and Greenwich Capital Commercial Fund-ing Corp., 2005-GG3). The 4.78% loan, which had an original balance of $427 million, was scheduled to mature in 2009, but the term was extended to 2014 as part of General Growth’s 2009 bankruptcy.

The 270,000-sf Shoppes at the Palazzo, which is next to the Palazzo Las Vegas casino, is 97.9% occupied. It is more akin to

a traditional department store-anchored retail center. Barneys New York has an 85,000-sf store that isn’t part of the collateral. The Palazzo mall contains a number of ultra-high-end retail-ers, including Chloe, Christian Louboutin, Diane von Fursten-burg, Fendi and Michael Kors.

Shoppes at the Palazzo carries $241.3 million of debt that matures in 2017. A bank syndicate consisting of Bank of Amer-ica, Citigroup, Deutsche Bank, Goldman and Wachovia provided that floating-rate loan, pegged to Libor plus 300 bp, in 2007.

Market players said a couple of factors make the package more suitable for a CMBS lender than for an insurer. For one thing, the Grand Canal Shoppes doesn’t fit the mold of a retail property typically pursued by life companies: a large regional center with well-defined anchor stores. What’s more, risk-averse insurers remain wary of Nevada’s economy, which was battered by the financial crisis. “Vegas, as far as its strength as a market, is still kind of questionable,” said one executive with an insurance company.

As of yearend, General Growth was carrying Grand Canal at a $765.7 million valuation, and the Palazzo mall at $289.8 million.

Just two weeks ago, Goldman securitized a $1.4 billion fixed-rate mortgage on another General Growth property, the Ala Moana mall in Honolulu.

Tishman ... From Page 1

until 2017). Leases on 50% of the space roll over by 2016. That was pitched as a plus for potential bidders because rising demand for office space in the city should provide the opportu-nity to raise rents as leases expire.

AEW bought the 33-story building in 2007 from Arizona developer William S. Levine on behalf of a client that was believed to be a UBS affiliate. It acquired the building at the top of the market, paying around $300 million.

The Financial District property, previously known as the Hartford Building, was the tallest structure in California when Hartford Insurance developed it in 1964 as its West Coast head-quarters.

May 18, 2012 Commercial Mortgage ALERT 8

• Top Loan Contributors to CMBS Deals • Top CMBS Underwriters • Mortgage-Conduit Operators • Top Law Firms in CMBS • Top Mortgage Servicers • And many more industry rankings

View them all for FREE in The Marketplace section of www.CMAlert.com.

Identify the Leaders In Your Business

Capstone, KABR Scoop Up Sour DebtTwo New Jersey firms that make opportunistic investments

in commercial real estate closed this month on their fifth joint purchase of distressed debt.

Capstone Realty and KABR Real Estate Investment paid spe-cial servicer LNR Partners just under 40 cents on the dollar for the $19.1 million defaulted mortgage on a Long Island office property. The firms have now co-purchased about $85 million of distressed debt over the last two years, targeting deals that allow them to take control of suburban New York office buildings.

The Long Island property consists of two office buildings at 330-350 Motor Parkway in Hauppauge, N.Y., that total 131,000 square feet, plus a pad site that’s leased to a Wendy’s restaurant. The buildings are 65% occupied. Eurohypo originated the 10-year loan to CLK Properties of Woodbury, N.Y., in 2006 and securi-tized it in a $4.9 billion pooled offering (J.P. Morgan Chase Com-mercial Mortgage Securities Trust, 2006-LDP9). Payments were long past due, and LNR had begun foreclosure proceedings. It sold the loan via its Auction.com affiliate.

Also within the past couple of weeks, the Capstone-KABR team accepted the deed in lieu of foreclosure on a 98,000-sf office building in Valhalla, N.Y. They paid GE Capital roughly $7 million about six weeks ago for a $13.6 million distressed loan on the Westchester County property. GE had originated the loan in 2008, with an initial balance of $16.5 million, for Abbey Road Advisors of Westport, Conn., and Guardian Life to acquire the property. The three-story building, at 465 Colum-bus Avenue, is 66% occupied. The New York City Department of Environmental Protection, which owns the nearby Kensico Reservoir, leases about half the space until 2024.

The 50-50 joint venture between Capstone, of Englewood, N.J., and KABR, of Ridgefield Park, N.J., targets both debt and equity investments. It seeks out distressed debt with an eye toward persuading the borrower to hand over the deed — which sometimes happens quickly, as in the Valhalla case. If a borrower resists, the team will seek to seize its property. After taking over, the firms typically make substantial improvements before considering a sale.

Capstone was founded in 1997 by co-managing partner Mitchell Adelstein, who previously spent 10 years as a man-aging director of Ernst & Young. The company is backed by wealthy individuals and institutional investors. The other prin-cipals are co-managing partner Robert Friedberg and partner Brad Gillman. Since late 2008, the firm has bought $100 million of defaulted commercial mortgages.

KABR, which was formed in 2008, is led by stock-market veteran Kenneth Pasternak, Laurence Rappaport and Adam Altman. Those three partners contributed about half of the $90 million of equity that’s split evenly between the firm’s two funds, which target opportunistic and value-added investments in underperforming and distressed office, retail and multi-family properties in the New York metropolitan area and South Florida. With leverage, KABR now has about $200 million of real estate assets under management.

May 18, 2012 Commercial Mortgage ALERT 9

NOTICE OF PUBLIC SALE OF COLLATERAL Please take notice that all of the equity interests owned by Michael F. Waldman (“Pledgor”) in: 1. St. Georges Crescent LLC, a New York limited liability company; 2. Paris LIC Realty LLC, a New York limited liability company; 3. 69 E. 130th L.L.C., a New York limited liability company; 4. 345 Greenwich Street, LLC, a New York limited liability company; 5. 2002 Fifth Avenue LLC, a New York limited liability company; 6. Idaho Associates LLC, a New York limited liability company; 7. 54 Barrow Realty, LLC, a New York limited liability company; 8. Mawash Realty Corp., a New York limited liability company (Pledgor’s ownership of this Collateral is disputed by Walter Sakow in pending litigation);

Ownership Interests Pledge and Security Agreements (the “Security Agreements”), each dated April 3, 2009, each by and between Pledgor and HSBC Capital (USA) Inc. on behalf of HSBC Real Estate Mezzanine Partners USA, L.P. (“Original Lender”),which Security Agreements and obligations secured thereby were subsequently assigned to LCP-GC LLC (“Secured Party”) and all proceeds of any of Collateral (all such assets, the “Collateral”) will be offered for sale at a public auction by Secured Party as secured party and sold to the highest

on June 7, 2012 at 10:00 a.m. at the

This sale is held to enforce the rights of the Secured Party under the Security Agreements. The Secured Party reserves the right to reject all bids, modify the Terms and

sale to another time, without further publication. Interested parties who would like additional information regarding the Collateral and the terms and conditions of the Sale (the “Terms and Conditions”) should visit the website www.perkinscoie.com/waldmanthirdavenuedevelopmentsecuredpartysale (the “Website”). Secured Party reserves the right to post additional terms and conditions to the Website. For further information contact counsel for Secured Party, Perkins Coie LLP, 30 Rockefeller Plaza, 25th Floor, New York, New York, 10112, Attn: Gary F. Eisenberg, Esq., at 212-262-6902 or by email at geisenberg@perkinscoie.com.

Huntington Shops Fla. Apartment DebtHuntington National Bank is trying to sell its majority stake

in a defaulted $41.5 million construction loan on a luxury apartment complex in Tampa.

The Cleveland bank holds $27.7 million of the syndicated debt, which financed development of the 250-unit Casa Bella on Westshore, a planned condominium complex that was switched to rentals. The nonperforming loan matured in December and a forbearance agreement expired April 1.

Huntington is marketing its share of the loan via DebtX. First-round bids are due May 24. The loan’s terms stipulate that only commercial banks with at least $500 million of assets are eligible to take over Huntington’s position.

Fifth Third Bank, also of Cleveland, holds the other $13.8 million slice of the debt. Fifth Third originated the interest-only loan in 2006, retaining a third of it and splitting the rest between Huntington and Sky Bank of North Olmsted, Ohio. Huntington doubled its share when it took over Sky in 2007.

The property is 96% occupied and was appraised at $47.5 million in February. It consists of three Mediterranean-style buildings at 6601 South Westshore Boulevard, about eight miles southwest of downtown Tampa.

Plans to sell the units as condos were abandoned when the market collapsed, and Casa Bella opened in 2008 as a rental apartment complex. The switch contributed to a legal dispute between the borrowers and Fifth Third that was settled under undisclosed terms three years ago.

CBRE Inks Colo., Texas Freddie LoansCBRE Capital Markets has originated about $65 million of

Freddie Mac loans to finance the acquisitions of two apartment complexes, in Colorado and Texas.

The 10-year, floating-rate loans were closed and funded about two weeks ago.

The larger is a $40.5 million mortgage on the 356-unit Lodge at Castle Pines in Castle Pines, Colo. Advenir, an Aventura, Fla., investment shop, bought the complex for $50.9 million, giv-ing the mortgage a loan-to-value ratio of about 79%. The note, priced at 197 bp over Treasurys, is interest-only for the first two years, then amortizes on a 30-year schedule. Lodge at Castle Pines was built in 2002 at 520 Dale Court, near Interstate 25 about 20 miles south of Denver. The 28-acre complex has a 24-hour fitness center, a swimming pool and spa, a clubhouse and a business center.

The second loan, for $24.2 million, is backed by the 246-unit Legacy Point in Arlington, Texas. Momentum Real Estate Partners of Miami bought the apartment property from Connor Group of Centerville, Ohio. The terms of the sale were unavail-able. The mortgage carries a rate of 201 bp over Treasurys and is interest-only for four years before amortizing on a 30-year schedule. Legacy Point is at 1901 Northeast Green Oaks Bou-levard, about midway between Dallas and Forth Worth. It was built in 1995. Amenities include a pool, fitness center and club-house.

Blackstone Funds Mezz for NormandyBlackstone has originated a $30 million floating-rate mez-

zanine loan for Normandy Real Estate on a Mid-Atlantic office portfolio.

The debt is subordinate to a $110 million floating-rate loan that Morgan Stanley closed this week. The bank plans to syndi-cate the entire senior loan.

Normandy, of Morristown, N.J., acquired the 787,000-square-foot portfolio in late 2006 from the U.S. Army/Air Force Mutual Aid Association for $157 million. The portfolio, which is 93% occupied, encompasses nine buildings in Northern Virginia and one in Columbia, Md. The largest property is the 214,000-sf Stoneleigh 1&2 complex in Chantilly, Va.

Normandy, which was advised by Cassidy Turley, used the proceeds from the Morgan Stanley and Blackstone loans to help retire a $144.6 million floating-rate loan that Morgan Stanley arranged in 2007. Morgan Stanley securitized the senior $85 million portion via a $1.4 billion pooled deal (Morgan Stan-ley Capital I Inc., 2007-XLF). The remaining $59.6 million was structured as mezzanine debt. Blackstone held a portion of that mezzanine debt when it funded the new loan.

Beech Street Lines Up Fannie LoansBeech Street Capital has agreed to originate $68 million of

Fannie Mae loans over the next several months to refinance four apartment complexes in the Philadelphia area.

The properties, two in Pennsylvania and two in Delaware, are owned by Galman Group of Philadelphia, which will use the fixed-rate mortgages to retire existing debt on the 1,106-unit portfolio. The four current loans can be prepaid without pen-alty at various dates over the next several months. The Fannie mortgages will be funded as the existing notes reach their pre-payment dates.

The agreement with Beech Street allows Galman to lock in interest rates now while avoiding prepayment penalties.

The properties are:•The 634-unit Castlebrook Apartments, on 38 acres at 550

South Dupont Parkway in New Castle, Del.•The 378-unit Buckingham Place complex, at 25 Windsor

Circle in Newark, Del.•The 101-unit North Lane Apartments, at 102-110 West

North Lane in Conshohocken, Pa.•The 93-unit Sedgwick Station, at 303 East Mount Pleasant

Avenue in the Mount Airy section of Philadelphia.

May 18, 2012 Commercial Mortgage ALERT 10

Unless your company holds a multi-user license, it is a violation of U.S. copyright law to photocopy or reproduce any part of this publication, or forward it electronically, without first obtaining permission from Commercial Mortgage Alert. For details about licenses, contact JoAnn Tassie at 201-234-3980 or jtassie@hspnews.com.

Jitters ... From Page 1

million class of benchmark paper was being marketed yester-day at 130 bp.

Meanwhile, J.P. Morgan is expected today to price a $270 mil-lion securitization of a 10-year loan on 1.2 million square feet of the 1.6 million-sf Walden Galleria mall in suburban Buffalo. The single-asset deal’s $217.5 million of 9.5-year bonds, rated triple-A by S&P, Morningstar and Kroll, were being marketed with an anticipated spread of 140-145 bp. The price talk on the rest of the bonds, which have 9.9-year terms, was 190-bp area on the double-As and 220-bp area on the notes rated A/A/A+.

The fixed-rate offering is backed by the senior portion of a $350 million loan that J.P. Morgan arranged for Pyramid Cos. of Syracuse, N.Y. The loan-to-value ratio is 45% on the senior mortgage and 58% on the overall debt, including $80 million of mezzanine debt placed with Principal Real Estate and Canada Pension Plan (see article on Page 3).

Renewed buy-side concerns about the escalating debt crisis in Europe are mostly to blame for the recent spread-widening on the conduit issues, which are the CMBS market’s main type of transaction. It didn’t help that yields on 10-year benchmark swaps have dropped 25 bp since the previous transaction, a $1.4 billion offering by UBS, Barclays and Archetype.

“Investors are pushing back on the absolute yield because swaps have rallied so much,” one CMBS trader said. “The other thing is, the world is really shaky out there.”

The recent spread-widening may cut into lender profits as CMBS issuers — including some of those in the market this week — prepare to float an additional $5 billion of multi-bor-rower issues by the end of June. Many of the commercial mort-gages slated for deals in the near-term pipeline were written early this year, when new-issue spreads were still tightening.

Spreads at issuance for benchmark super-seniors contracted from 130-150 bp over swaps in December to 120 bp in late Jan-uary, when Goldman, Citi and Archetype priced the first CMBS offering of the year (GS Mortgage Securities Trust, 2012-GC6). By early March, those spreads had tightened to 105 bp, their lowest levels in over a year. But they started rising again last month amid renewed financial-market turmoil.

Meanwhile, the Federal Reserve Bank of New York is prepar-ing to sell another large batch of commercial real estate CDO paper in the secondary market. BlackRock is running the auc-tion Tuesday for Maiden Lane 3, one of two vehicles created by the Fed to support the 2008 government bailout of AIG. The offering consists of six senior classes of bonds, with outstand-ing balances totaling $688.4 million, from a $2 billion issue that Boston money manager Putnam Advisory floated via two installments 10 years ago (Putnam Structured Product CDO Ltd., 2002-1). CMBS makes up more than 60% of the collateral. The rest is a mix of residential mortgage bonds, asset-backed securities and other CDOs. The CDO paper being offered for sale, now rated “Ba1” by Moody’s, could fetch bids of 85-89 cents on the dollar.

May 18, 2012 Commercial Mortgage ALERT 11

In the know?Commercial Mortgage Alert, the weekly newsletter that guarantees your edge in real estate finance and securitization.

Start your free trial at CMAlert.com or call 201-659-1700.

May 18, 2012 Commercial Mortgage ALERT 12

REIT Credit Ratings for Senior Unsecured DebtOffice Moody’s S&P FitchLiberty Property Baa1 BBB BBB+Boston Properties Baa2 A- BBBPS Business Parks Baa2 BBB+ Digital Realty Baa2 BBB BBBMack-Cali Realty Baa2 BBB BBBPiedmont Office Realty Baa2 BBB Vornado Realty Baa2 BBB BBBAlexandria Real Estate Baa2 BBB- BioMed Realty Baa3 BBB- Brookfield Office Properties Baa2 BBB- CommonWealth REIT Baa2 BBB- Duke Realty Baa2 BBB- BBB-Highwoods Properties Baa3 BBB- BBB-Kilroy Realty Baa3 BBB- Wells REIT Baa3 BBB- Brandywine Realty Baa3 BBB- BB+Government Properties Income Baa3 BBB- American Realty Capital Ba2 B+ SL Green Ba1 BBB- BB+DuPont Fabros Technology Ba1 BB

Retail Simon Property A3 A- A-Federal Realty Investment Baa1 BBB+ A-Kimco Realty Baa1 BBB+ BBB+Realty Income Baa1 BBB BBB+National Retail Properties Baa2 BBB BBBRegency Centers Baa2 BBB BBBTanger Factory Outlet Centers Baa2 BBB Weingarten Realty Baa2 BBB Equity One Baa3 BBB- First Capital Realty Baa3 Entertainment Properties Baa3 BB+ BBB-DDR Baa3 BB+ BB+General Growth Properties BB+ Glimcher Realty Ba3 B- Brixmor Caa1 B BB-

Multi-Family AvalonBay Communities Baa1 BBB+ Equity Residential Properties Baa1 BBB+ BBB+Camden Property Baa1 BBB BBBBRE Properties Baa2 BBB BBBEssex Property Baa2 BBB BBBUDR Baa2 BBB Home Properties BBBMid-America Apartment Communities BBBAmerican Campus Communities Baa3 BBB- Post Properties Baa3 BBB- Colonial Properties Ba1 BBB- BB+Apartment Investment & Management Ba1 BB+ Associated Estates Realty Ba1 BB- BB+

Healthcare Moody’s S&P FitchHCP Baa2 BBB BBB+Ventas Baa2 BBB BBB+Health Care REIT Baa2 BBB- BBBHealthcare Realty Baa3 BBB- BBB-Healthcare Trust of America Baa3 BBB- Senior Housing Properties Baa3 BBB- Medical Properties Ba1 BB Omega Healthcare Investors Ba2 BBB- Sabra Health B1 BB- Aviv REIT B1 B+ Extendicare Real Estate Investment B1

Hotel Hospitality Properties Baa2 BBB- Host Hotels & Resorts Ba1 BBFelCor Lodging B3

Industrial Eastgroup Properties BBBProLogis Baa2 BBB- BBB-First Industrial Realty Ba3 BB- BB

Self Storage Public Storage A3 A ACubeSmart Baa3 BBB- Sovran Self Storage BBB- BBB-

Diversified Washington Real Estate Investment Baa1 BBB+ Prime Property Fund Baa2 A- LNR Property Ba2 BB- Forest City B3 B-

Other American Tower Baa3 BB+ BBB-Corrections Corp. of America Ba1 BB BB+Capital Automotive Ba3 B+ CNL Lifestyle Ba3 B+ GEO Group B1 B+ iStar Financial Caa1 B+ B-Spirit Finance Caa1 CCC+

Notes: In some cases, REITs issue securities through operating partnerships. Some of the above ratings are prospective, so securities may not have been issued.

Dear Subscriber:

A number of Commercial Mortgage Alert readers, who are concerned about violating copyright law, have been asking about the terms of our Multi-User Licenses.

Here’s how they work: Licenses cater to companies that require wide distribution of the newsletter. For an annual fee, a company is authorized to make enough copies of each issue to accommodate a specific group of employees. To assist you in distributing the newsletter,we can send each week’s issue directly to any employees you specify.You choose the method of delivery: e-mail or postal.

Such arrangements have become popular ways for corporate subscribers tocomply with U.S. copyright laws.

From our standpoint, there’s nothing wrong with occasionally copying a pageor two from our newsletter to pass along to an associate. In addition, we arehappy to authorize a subscriber to reproduce — at no extra charge — any ofour articles or tables for a report or some other type of presentation. And if asubscriber is preparing for a conference or some other type of meeting, we’reglad to provide free copies of the newsletter for attendees.

What’s unacceptable is the routine reproduction or electronic forwardingof our newsletters for use by others — without first obtaining a license.This is a blatant, actionable violation of our copyright. We routinelymonitor forwarding of the publication by employing email-tracking technology such as ReadNotify.com.

Feel free to call me at 201-234-3960 if you’d like additional informationabout Multi-User Licenses.

Sincerely,

Andrew AlbertPublisher

5 Marine View Plaza, Suite 400Hoboken NJ 07030-5795

201-659-1700FAX: 201-659-4141

May 18, 2012 Commercial Mortgage ALERT 14

Large Loans Recently Transferred to Special Servicing Current Sent to Balance Loan Maturity Special ($Mil.) Type Date Date Servicer Status SecuritizationFranklin Mills, Philadelphia (Retail) $290.0 Fixed 5/4/07 6/1/17 4/16/12 Current VariousMarley Station, Glen Burnie, Md. (Retail) 114.4 Fixed 6/9/05 7/1/12 4/20/12 Current BACM 05-3Regency Square Mall, Jacksonville 86.2 Fixed 6/13/03 7/15/15 4/27/12 Current VariousBoulder Green office & industrial portfolio 62.0 Fixed 4/4/07 5/1/12 5/2/12 Matured, nonperf. CMLT 08-LS1Thanksgiving Tower, Dallas (Office) 58.5 Floating 2/20/07 6/15/12 4/18/12 Matured, perf. BSCMS 07-BBA8Southside Works, Pittsburgh (Mixed-use) 49.6 Fixed 1/4/07 2/1/17 4/13/12 30-59 days late JPMCC 07-CIBC18Crowne Plaza Metro, Chicago (Hotel) 48.4 Fixed 5/17/07 6/1/12 5/1/12 Current JPMCC 07-CIBC196303 Barfield Road, Atlanta (Office) 41.1 Fixed 4/13/05 5/1/13 4/6/12 Current JPMCC 050CIBC12Corporate Center, Ft. Lauderdale, Fla. (Office) 39.5 Fixed 3/10/06 4/6/16 4/16/12 90+ days late GCCFC 06-GG7Almaden Financial Plaza, San Jose (Office) 37.0 Floating 4/27/07 6/15/12 5/9/12 Matured, perf. LBFRC 07-LLF C5IPC New York office portfolio 34.0 Fixed 5/31/05 6/1/15 4/4/12 30-59 days late BACM 05-3Park Hyatt Beaver Creek, Avon, Colo. (Hotel) 31.6 Floating 5/24/07 6/15/12 4/12/12 Current LBFRC 07-LLF C5TownePlace Suites Colorado portfolio (Hotel) 30.5 Floating 5/7/07 5/7/12 5/8/12 Matured, nonperf. BALL 07-BMB11020 Holcombe Boulevard, Houston (Office) 28.9 Fixed 11/1/02 11/1/12 4/30/12 Current BACM 03-1Flushing Landmark, Flushing, N.Y. (Office) 28.9 Fixed 7/20/06 6/1/16 5/2/12 60-89 days late BACM 06-4Tamarac Plaza, Denver (Office) 27.4 Fixed 7/27/04 8/10/12 5/2/12 Current GSMS 04-GG2Research Park Plaza, Austin, Texas (Office) 23.6 Floating 6/1/07 6/15/12 4/12/12 Current LBFRC 07-LLF C5Parkview Village, Long Beach, Calif. (Mixed-use) 23.4 Fixed 5/15/07 6/8/17 4/18/12 Current MLCFC 07-7Landmark Office Center, Indianapolis (Office) 23.2 Fixed 10/2/07 11/1/17 4/27/12 Current JPMCC 07-C1Tempe Commerce, Tempe, Ariz. (Office) 22.8 Fixed 4/20/07 5/6/14 5/4/12 Current GSMS 07-GG10

Source: Trepp

xxx Commercial Mortgage ALERT 1

MARKET MONITOR

CMBS SPREADS

10YR, AAA SPREAD OVER SWAPS CMBS SPREADS OVER SWAPS

WORLDWIDE CMBS

LOAN SPREADS CMBS TOTAL RETURNS

ASKING SPREADS OVER TREASURYS ASKING OFFICE SPREADS CMBS INDEX

REIT BOND ISSUANCE

UNSECURED NOTES, MTNs, ($Bil.) MONTHLY ISSUANCE ($Bil.) SPREADS

Data points for all charts can be found in The Marketplace section of CMAlert.com

0

100

200

300

400

5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12

Source: Trepp

US MONTHLY ISSUANCE ($Bil.)

0

1

2

3

4

5

6

7

M A M J J A S O N D J F M A M

0

1,000

2,000

3,000

4,000

5,000

6,000

AAA AA A BBB BBB-

Current

6 months ago

YTD YTD Category 2012 2011 2011

US Total 10.8 9.6 32.7

Non-US Total 1.9 1.3 3.3

TOTAL 12.7 10.9 36.0

Spread (bp) Fixed Rate Avg. Week 52-wk (Conduit) Life 5/16 Earlier Avg.

AAA 5.0

10.0 S+165 S+232

S+148 S+210

+197 +239

AA 10.0 S+1,996 S+1,975 +2,105

A 10.0 S+2,619 S+2,589 +2,667

BBB 10.0 T+4,278 T+4,241 +4,211 Dollar Price Week 52-wk Markit CMBX 05-1 5/16 Earlier Avg.

AAA 91.1 92.5 91.4

AA 42.2 45.0 47.2

A 28.2 30.9 35.1

BBB 18.1 18.2 19.4

BB 5.0 5.0 5.0 Sources: Trepp, Markit

Month 5/11 Earlier

Office 220 206

Retail 213 195

Multi-family 203 184

Industrial 210 189 Source: Trepp

0

50

100

150

200

250

300

O N D J F M A M

10-year loans with 50-59% LTV

Total Return (%) Avg. Month Year Since

As of 5/16 Life to Date to Date 1/1/97

Inv.-grade 3.8 -0.4 3.7 176.5

AAA 3.5 -0.2 2.7 169.6

AA 4.0 -0.5 4.3 68.6

A 4.4 -0.8 5.1 52.0

BBB 4.5 -0.9 6.8 48.9 Source: Barclays

0

3

6

9

12

15

18

J F M A M J J A S O N D 0

1

2

3

4

M A M J J A S O N D J F M A M

Rating Amount Spread CDS 5/11 Maturity (M/S) ($Mil.) (bp) (bp)

Kimco 10/19 Baa1/BBB+ 300 T+195 141

Simon Property 3/22 A3/A- 600 T+149 94

Equity Residential 12/21 Baa1/BBB+ 1,000 T+165 125

Prologis 3/20 Baa2/BBB- 540 T+230 167

AvalonBay 1/21 Baa1/BBB+ 250 T+135 92

Duke Realty 3/20 Baa2/BBB- 250 T+210 165

Boston Properties 5/21 Baa2/A- 850 T+155 122

Health Care Property 2/21 Baa2/BBB 1,200 T+200 149

Regency Centers 4/21 Baa2/BBB 250 T+215

Liquid REIT Average Baa1/BBB+ 582 T+184 132

Source: Wells Fargo

2011

2012

May 18, 2012 Commercial Mortgage ALERT 15

TO SUBSCRIBE

Signature:

COMMERCIAL MORTGAGE ALERT www.CMAlert.com

THE GRAPEVINE... From Page 1

May 18, 2012 Commercial Mortgage ALERT 16

commercial mortgage securitization for the Wilmington, Del., online bank. Hallock was a senior originator at Wachovia until 2007 and has since had stints at Centerline Capital and Carl Marks Advisory. He reports to Ron Wechsler, head of the securitization program that Bancorp Bank rolled out in March. Alex Leybov also joined the New York unit last week as a vice president, working on originations, underwriting and securitization. Leybov spent the past six years at RAIT Financial, a Philadelphia REIT, where Wechsler formerly co-headed the CMBS group. Bancorp Bank is still on the prowl for a head underwriter and at least one more originator.

Commercial real estate attorney Brian Smetana left the law firm of Winston & Strawn two weeks ago to join New York-based Rosenberg & Estis, where he is of

counsel. He specializes in helping major lenders arrange senior mortgages, including loans to be securitized, on commercial and residential properties. Smetana also has worked with develop-ers on purchases, sales and financings of New York City properties. He had been an associate at Winston, also in New York, since coming aboard from Herzfeld & Rubin in 2006.

Moody’s has hired lawyer Simon Burce as an assistant vice president in New York. He started April 23, working for senior vice president Dan Rubock, an attorney in the CMBS group who focuses on deal structures and legal issues pertaining to ratings in that sector. Burce spent the last four years at Alston & Bird, also in New York, as an associate in the law firm’s real estate finance and investment group.

CMBS trader George Geotes resigned this week as a vice president of Nomura to join Credit Suisse. He will start next month as a director in the Swiss bank’s

New York office, where he will continue to focus on trading and distribution of agency bonds. He will report to manag-ing director Christopher Callahan, who previously worked at Nomura and hired Geotes there in 2004. Geotes replaces John McGrath, who left Credit Suisse in early March to spearhead agency-CMBS trading at Goldman Sachs. McGrath started his new job on May 7.

Anne Space recently joined the asset-management group of UBS. She was formerly an assistant vice president of real estate investments at Hartford Invest-ment, where she had worked since 2006.

Invesco Real Estate is looking for a senior investment analyst to work with its opportunistic and structured invest-ments team, which is based in Dallas. Responsibilities include underwriting and structuring of new investments, as well as portfolio management. Candi-dates should have 1-3 years of experi-ence. Contact Bert Crouch at bert.crouch@invesco.com.

YES! Sign me up for a one-year subscription to Commercial Mortgage Alert at a cost of $4,097. I understand I can cancel at any time and receive a full refund for the unused portion of my 46-issue subscription.

DELIVERY (check one): q E-mail. q Mail.

PAYMENT (check one): q Check enclosed, payable to Commercial

Mortgage Alert. q Bill me. q American Express. q Mastercard.

q Visa.

Account #:

Exp. date:

Name:

Company:

Address:

City/ST/Zip:

Phone:

E-mail:

MAIL TO: Commercial Mortgage Alert www.CMAlert.com 5 Marine View Plaza #400 FAX: 201-659-4141 Hoboken NJ 07030-5795 CALL: 201-659-1700

Telephone: 201-659-1700 Fax: 201-659-4141 E-mail: info@hspnews.com

Donna Knipp Managing Editor 201-234-3967 dknipp@hspnews.comBob Mura Senior Writer 201-234-3978 bmura@hspnews.comRichard Quinn Senior Writer 201-234-3997 rquinn@hspnews.comChad Weihrauch Senior Writer 201-234-3988 chad@hspnews.com

Andrew Albert Publisher 201-234-3960 andy@hspnews.comDaniel Cowles General Manager 201-234-3963 dcowles@hspnews.comThomas J. Ferris Editor 201-234-3972 tferris@hspnews.comT.J. Foderaro Deputy Editor 201-234-3979 tjfoderaro@hspnews.comBen Lebowitz Deputy Editor 201-234-3961 blebowitz@hspnews.comDan Murphy Deputy Editor 201-234-3975 dmurphy@hspnews.comMichelle Lebowitz Operations Director 201-234-3977 mlebowitz@hspnews.comEvan Grauer Database Director 201-234-3987 egrauer@hspnews.comMary E. Romano Advertising 201-234-3968 mromano@hspnews.comJoy Renee Selnick Layout Editor 201-234-3962 jselnick@hspnews.comBarbara Eannace Marketing Director 201-234-3981 barbara@hspnews.comJoAnn Tassie Customer Service 201-659-1700 jtassie@hspnews.com

Commercial Mortgage Alert (ISSN: 1520-3697), Copyright 2012, is published weekly by Harrison Scott Publications Inc., 5 Marine View Plaza, Suite 400, Hoboken, NJ 07030-5795. It is a violation of federal law to photocopy or distribute any part of this publication (either inside or outside your company) without first obtaining permission from Commercial Mort-gage Alert. We routinely monitor forwarding of the publication by employing email-tracking technology such as ReadNotify.com. Subscription rate: $4,097 per year. Information on advertising and group subscriptions is available upon request.