Take the express to capital.

(1)

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For more information, visit www.capitalsource.com

Acquisition Financing

$24 Million Senior Loan

Single Family For-Rent Portfolio Georgia

$15 Million Senior Loan

Hospitality – Florida

$28 Million Senior Loan

Mixed Use Office/Telco – Missouri Note Acquisition Financing

$15 Million Senior Loan

Condominium – New York Acquisition Financing

$35 Million Senior Loan

Industrial – Texas

(2)

Loans Post 1.2% Quarterly Gain

Returns on commercial mortgages reached 1.15% in the

third quarter, an improvement on the 0.74% return in the

pre-vious three months, according to the Giliberto-Levy

Commer-cial Mortgage Performance Index.

Loan income remained little changed at 1.34%, compared

with 1.32% in the second quarter and identical to the

first-quarter figure. But net returns improved significantly because

loan valuations declined by just 19 bp — compared with a

58-bp slide from April through June.

Spreads, on average, moved up by about 10 bp during the

quarter. Most of that increase was seen on retail and apartment

loans, which accounted for 57% of new lending activity. Office

and industrial spreads, meanwhile, were essentially flat.

Loan losses declined to 120 bp for the period, a modest

improvement over the 130 bp level seen over the trailing 12

months. “We think this trend is likely to continue because

col-lateral values are generally stable to improving, and many

prob-lem loans have now been through restructuring or foreclosure,”

said investment manager

Michael Giliberto,

_{who compiles the}

index along with mortgage banker

John Levy.

While loan returns often are affected by changes in the

10-year Treasury yield, that wasn’t a factor in the third quarter

since that benchmark yield was nearly the same on Sept. 30, at

1.65%, verses 1.67% on June 30.

Loan originations captured by the index plunged to $4.8

See RETURNS on Page 15

Mortgage-Performance Comparison

Return Return Return 3Q-12 12 mo. Duration

(%) (%) (years) Mortgages All commercial 1.15 3.23 3.77 Office mortgages 1.21 4.06 3.73 Multi-family mortgages 1.03 1.81 3.93 Retail mortgages 0.97 3.58 3.97 Industrial mortgages 1.15 2.11 3.41

CMBS Investment-grade 3.91 11.97 3.31

Corporates Barclays Capital Bond Index 3.83 10.76 7.20 Triple-B (duration adjusted) 2.93 9.06 3.77

Treasurys (5-7 year) 1.01 4.47 5.75

Sources: Giliberto-Levy and Barclays

-5 0 5 10 15 20 25 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Giliberto-Levy Commercial Mortgage Performance Index

Year-over-year percent change

2008 2009 2010 2011 2012

N O V E M B E R 2 8th_{, 2 0 1 2 | N E W Y O R K}

2 N D

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(3)

Special-Servicing Rate Dips Again

The special-servicing rate among securitized commercial

mortgages resumed its gradual decline last month.

The percentage of commercial MBS loans in the hands

of special servicers finished October at 12.66%, down from

12.82% in September, according to

Trepp.

_{The latest tally found}

3,711 mortgages in that category, down from 3,828 a month

earlier, and the aggregate balance fell by $1.1 billion to $71.3

billion, the lowest level since the end of 2009.

With some bumps along the way, the dollar value of loans

in special servicing has been trending lower since September

2010, when it hit a peak of $89.9 billion. The percentage rate

has edged down more slowly because the CMBS universe also

has been shrinking.

The only loan of more than $100 million that was added to

Trepp’s index in October was a $144.1 million senior mortgage on

a hotel portfolio. It was originated in late 2006 for

California State

Teachers,

_a

Morgan Stanley

_{fund and}

Pyramid Advisors

_{and was}

included in a $1.4 billion transaction (Morgan Stanley Capital I

Inc., 2007-XLF). The note, with an original balance of $152

mil-lion, was part of a $295 million debt package on seven full-service

hotels totaling 2,357 rooms in six states. The loan had a two-year

term and three single-year extension options. It was restructured

in 2009, and last October it was extended for an additional year.

The mortgage was transferred to special servicing days before that

extension ran out last month. At the time, the borrower was

cur-rent on payments and seeking a fifth extension.



November 9, 2012

_{Commercial Mortgage}

15

ALERT

Breakdown of CMBS Servicing

As of Oct. 31

Portion of

Loan Type Share of Share of In Special Special All CMBS Balance Servicing Servicing Loans Collateral ($Mil.) (%) (%) (%) Office $21,989.9 13.08 30.86 29.87 Retail 15,749.6 9.05 22.10 30.93 Multi-family 11,930.8 16.29 16.74 13.01 Hotel 10,927.8 19.13 15.33 10.15 Industrial 4,015.3 15.51 5.63 4.60 Other 6,648.7 10.33 9.33 11.43 TOTAL 71,262.1 12.66 100.00 100.00 0% 3% 6% 9% 12% 15% 18% 12/07 12/08 12/09 12/10 12/11 Source: Trepp

CMBS Loans in Special Servicing

Balance as percentage of all U.S. CMBS loans

Large Loans Recently Transferred to Special Servicing

Current Sent to

Balance Loan Maturity Special

($Mil.) Type Date Date Servicer Status Securitization

HRO hotel portfolio $144.1 Floating 10/5/06 10/9/11 10/4/12 Current MSC 07-XLF

17 Battery Place North, New York (Office) 53.0 Fixed 10/29/04 11/11/09 9/24/12 Current WBCMT 05-C16 Marriott, Overland Park, Kan. 46.8 Fixed 8/7/07 8/15/14 9/27/12 Current JPMCC 07-LDP12 Laurel Springs Apartments portfolio, High Point, N.C. 40.7 Fixed 3/1/07 3/11/17 9/18/12 30-59 days late CSMS 07-C2 New Jersey industrial/office portfolio 39.7 Fixed 1/25/07 2/11/17 9/14/12 Current WBCMT 07-C30 Sandpiper Apartments, Las Vegas 31.9 Fixed 6/30/05 7/11/15 10/1/12 Current LBUBS 05-C5 Equitable Building, St. Louis (Office) 29.1 Fixed 2/15/07 3/1/17 9/14/12 Current MSC 07-IQ14 Carriage Club Apartments, Mooresville, N.C. 25.7 Fixed 3/1/07 3/11/17 9/18/12 Current CSMS 07-C2 200 South Tryon, Charlotte (Office) 20.0 Fixed 4/17/07 5/11/17 9/27/12 30-59 days late WBCMT 07-C31 Beauregard Square, Alexandria, Va. (Mixed-use) 15.0 Fixed 3/13/07 4/5/17 9/7/12 In foreclosure MSC 07-IQ14

Source: Trepp

Returns

... From Page 14

billion in the third quarter from nearly $9.9 billion in the

ear-lier period, although some loans that closed late in the

quar-ter may have been omitted.

The proportion of new loans that are interest-only for their

full term swooned to 10% in the third quarter, from 34.5% in

the previous three-month period. And those loans, on average,

had smaller balances than those with full or partial

amortiza-tion — reversing a recent trend.

Other assets bested commercial mortgages in performance

during the period.

Barclays

_{reported a 3.83% return for its}

cor-porate bond index, while investment-grade commercial MBS

posted an impressive 3.91% gain.

The Giliberto-Levy index, produced and distributed by

London-based

IPD,

_{tracks $191.7 billion of fixed-rate}

com-mercial mortgages with an average coupon of 5.8% and an

average maturity of 5.6 years.



(4)

INITIAL PRICINGS

BB-UBS Trust, 2012-SHOW

Pricing date: Nov. 1

Property types: Retail (100%). Concentrations: Nevada (100%).

Loan contributors: Barclays (50%) and UBS (50%).

Notes: Barclays and UBS securitized an $835 million loan to General Growth Properties on Fashion Show Mall in Las Vegas. Barclays and UBS originated the 12-year, interest-only loan on a 50/50 basis in October. The 4% mortgage is collateralized by 836,000 sf at the 1.9 million-sf property. The collateral was appraised at $1.44 million. General Growth used most of the proceeds to retire $613 million of debt that was securitized via two transactions: Banc of America Commercial Mortgage Inc., 2005-1 and 2005-2. CMA code: 20120151.

Closing date: Nov. 6

Amount: $835 million

Seller/borrower: General Growth Properties Lead managers: Barclays,

UBS

Co-managers: Bank of America, Drexel Hamilton Master servicer: Wells Fargo Special servicer: Wells Fargo

Trustee: U.S. Bank

Certificate administrator: Wells Fargo Offering type: Rule 144A

Amount Rating Rating Rating Subord. Coupon Dollar Yield Maturity Avg. Life Spread

Class ($Mil.) (Moody's) (S&P) (Kroll) (%) (%) Price (%) (Date) (Years) (bp) Note Type

A 539.500 Aaa AAA AAA 35.39 3.430 102.999 3.146 11/5/36 11.98 S+115 Fixed

B 82.600 Aa2 AA AA 25.50 3.882 102.999 3.596 11/5/36 11.98 S+160 Fixed

C 77.800 A2 A A 16.18 4.026 101.580 3.946 11/5/36 11.98 S+195 Fixed

D 42.100 Baa2 A- BBB+ 11.18 4.026 97.418 4.396 11/5/36 11.98 S+240 Fixed

E 93.000 Baa3 BBB- BBB- 0.00 4.026 93.463 4.846 11/5/36 11.98 S+285 Fixed

X-A(IO) 539.500* Aaa AAA AAA 11/5/36 Fixed

X-B(IO) 82.600* Aa2 AA AAA 11/5/36 Fixed

*Notional amount

INITIAL PRICINGS

Loans

... From Page 1

about half of the units. The loan is likely to attract interest from

investors interested in taking over the unsold condos.

Offers for both pools are due late next week. Bank of

Scot-land is looking to complete the sales by yearend.

The loans represent nearly all of Bank of Scotland’s

remain-ing U.S. loan book, accordremain-ing to a source familiar with the

mat-ter. The bank has stopped writing mortgages in the U.S.

The pool of performing mortgages has a weighted

aver-age loan-to-value ratio of roughly 65%. The weighted averaver-age

remaining term is 20 months, and the weighted average

cou-pon is about 3.75%. Two-thirds of the underlying properties, by

loan balance, are in or around New York, Washington, Boston,

Los Angeles and Chicago.

The largest loan in the pool is a $68 million participation

interest in a $309 million mortgage on the 1,000-room Hilton

Orlando Bonnet Creek, near Walt Disney World Resort. The

hotel is owned by a partnership between

GEM Realty

_of

Chi-cago,

Farallon Capital

_{of San Francisco and}

Blackstone

_{of New}

York.

Other large loans in the pool include:

• A $59 million participation interest in a $179 million loan

on the W New York-Downtown Hotel & Residences, at

123 Washington Street in Lower Manhattan. The 58-story

property, which encompasses 217 hotel rooms and 223

condominium units, is owned by New York developer

Joseph Moinian.

• A $40 million participation interest in a $250 million

loan on the 796,000-square-foot office building at 75 State

Street in Boston. The property, which includes 25,000 sf of

retail space and a 235-space garage, is owned by

Brookfield

Office Properties

_{of New York.}

Bank of Scotland and its parent,

HBOS,

_{were absorbed}

by Lloyds in January 2009 as part of a British

government-brokered effort to prevent them from collapsing amid the

global financial crisis. Two months later, Lloyds ceded

par-tial ownership of its operations to the government. Lloyds

has been selling much of its commercial-mortgage portfolio

globally.



(5)

November 9, 2012

_{Commercial Mortgage}

17

ALERT

INITIAL PRICINGS

Motel 6 Trust, 2012-MTL6

Property types: Hotel (100%).

Concentrations: California (35.7%) and Texas (13.5%).

Loan contributors: J.P. Morgan (45%), Deutsche (45%) and Citi (10%).

Notes: J.P. Morgan, Deutsche and Citigroup teamed up to securitize the senior $1.05 billion portion of a $1.37 billion interest-only debt package they originated on Oct. 1 for a Blackstone fund on 517 Motel 6 hotels. Blackstone Real Estate Partners 7 used the loan proceeds to help finance its $1.8 billion buyout of the Motel 6 chain from Paris-based Accor. The fixed-rate senior portion of the debt package has a five-year term and a 5.1% coupon. The $318 million subordinate portion, which was placed with numerous investors, is divided into two pieces: a $118 million floating-rate senior mezzanine tranche with a coupon of Libor plus 760 bp and a three-year term, which can be extended by two years; and a $200 million fixed-rate junior mezzanine tranche with a 10% coupon and a five-year term. Blackstone invested $611.8 million of equity in the buyout, including re-serves and closing costs. CMA code: 20120137.

Amount: $1,050.0 million

Seller/borrower: Blackstone Group Lead managers: J.P. Morgan,

Deutsche Bank

Co-manager: Citigroup

Master servicer: KeyCorp

Special servicer: KeyCorp

Trustee: Wells Fargo

Certificate administrator: Wells Fargo Offering type: Rule 144A

Class ($Mil.) (S&P) (Fitch) (MStar) (%) (%) Price (%) (Date) (Years) (bp) Note Type

A-1 105.000 AAA AAA AAA 51.50 1.500 99.750 1.631 10/5/25 1.90 S+125 Fixed

A-2 404.500 AAA AAA AAA 51.50 1.948 100.000 1.952 10/5/25 4.89 S+115 Fixed

B 189.900 AA- AA- AA- 33.40 2.743 100.000 2.752 10/5/25 4.89 S+195 Fixed

C 145.100 A- A- A- 19.60 3.139 100.000 3.152 10/5/25 4.89 S+235 Fixed

D 185.500 BBB- BBB- BBB- 1.90 3.781 100.000 3.802 10/5/25 4.89 S+300 Fixed

E 20.000 BB+ BB+ BBB- 0.00 4.274 100.000 4.302 10/5/25 4.89 S+350 Fixed

XA-1(IO) 405.500* AAA AAA AAA 3.005 6.172 1.893 10/5/25 T+160 Fixed

XA-2(IO) 509.500* AAA AAA AAA 10/5/25 Fixed

XB-1(IO) 540.500* BB+ BB+ AAA 1.692 3.490 3.042 10/5/25 T+275 Fixed

XB-2(IO) 540.500* BB+ BB+ AAA 10/5/25 Fixed

*Notional amount

(6)

INITIAL PRICINGS

COMM Mortgage Trust, 2012-CCRE4

Property types: Retail (40.6%), office (24.5%), mixed-use (14.6%), hotel (12%), industrial (4.7%), self-storage (2.8%), multi-family (0.4%) and other (0.4%). Concentrations: New York (23%) and California (22.7%).

Loan contributors: Deutsche (48.3%), Cantor (38.6%) and KeyBank (13.1%). Largest loans: A $125 million senior portion of a $200 million loan to Eric Hadar and Stanley Cayre on the 355,000-sf Prince Building in Manhattan; a $120 million senior portion of a $210 million loan to Wilmorite on the 1.4 million-sf Eastview Mall and Eastview Commons power center in Victor, N.Y.; a $73 million loan to James Schlesinger of Talisman Cos., Jakob Brodt and Brigita Zaidman on the 376,000-sf Fashion Outlets of Las Vegas retail center in Primm, Nev.; a $60 mil-lion loan to Joseph Paul on the 216,000-sf Synopsys Tech Center in Sunnyvale, Calif.; a $58.8 loan to DivcoWest Properties on Buildings B and D, encompassing 600,000 sf, of the Concord Plaza office complex in Concord, Calif.; a $45.9 million loan to TMI Hospitality on 10 hotels, encompassing 717 rooms, in six states; a $40.1 million loan to Keystone Property on the 248,000-sf Dadeland Office Park in Miami; a $39.9 million senior portion of a $114.7 million loan to Mayflower Realty on the 1 million-sf Emerald Square Mall in North Attleboro, Mass.; a $35 million loan to Mohannad Malas on four stand-alone Lowe’s Home Centers, en-compassing 524,000 sf, in Georgia; and a $33.9 million loan to Gladstone Com-mercial on four office and three industrial properties, encompassing 531,000 sf, in six states.

B-Piece buyer: CBRE Capital.

Notes: Deutsche, Cantor and KeyBank teamed up to securitize commercial mort-gages that they had originated. CMA code: 20120136.

Seller/borrower:

Deutsche Bank, Cantor Fitzgerald, KeyBank Lead managers: Deutsche Bank,

Cantor Fitzgerald Co-managers:

KeyBank,

CastleOak Securities, RBS

Master servicer: Wells Fargo

Special servicers: Torchlight Loan Services, Midland Loan Services Operating advisor: Park Bridge Lender Services

Trustee: U.S. Bank

Certificate administrator: Wells Fargo Offering type: SEC-registered

Class ($Mil.) (Moody's) (S&P) (Fitch) (%) (%) Price (%) (Date) (Years) (bp) Note Type

A-1 59.118 Aaa AAA AAA 30.00 0.704 99.999 0.695 10/15/45 2.69 S+25 Fixed

A-SB 70.571 Aaa AAA AAA 30.00 2.436 102.498 2.069 10/15/45 7.47 S+73 Fixed

A-M 111.100 Aaa AAA AAA 20.00 3.251 102.499 2.964 10/15/45 9.92 S+122 Fixed

B 65.271 Aa3 AA- AA- 14.13 3.703 102.493 3.414 10/15/45 9.92 S+167 Fixed

C 38.885 A3 A- A- 10.63 4.442 102.496 4.151 10/15/45 9.97 S+240 Fixed

D 45.829 Baa3 BBB- BBB- 6.50 4.546 86.050 6.606 10/15/45 10.01 S+485 Fixed

E 19.442 Ba2 BB BB 4.75 4.579 10/15/45 10.01 Fixed

F 18.054 B2 B+ B 3.13 4.579 10/15/45 10.01 Fixed

G 34.719 NR NR NR 0.00 4.579 10/15/45 10.01 Fixed

X-A(IO) 888.800* Aaa AAA AAA 2.028 10/15/45 Fixed

X-B(IO) 222.200* Ba3 NR NR 0.600 10/15/45 Fixed

*Notional amount

(7)

C R E F I N A N C E C O U N C I L

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January 14-16, 2013

L O E w s M I A M I B E A C h h O t E L

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Join us in Miami this January...

January 2013 Conference Co-Chairs:

Richard Jones, Partner, Dechert LLP

Mark McCool, Executive Vice President, Berkadia Commercial Mortgage LLC

Gregory Michaud, Senior Vice President & Head of Real Estate Finance, ING Investment Management

(8)

INITIAL PRICINGS

Freddie Mac Structured Pass-Through Certificates, K-711

FREMF Mortgage Trust, 2012-K711

Property types: Multi-family (100%).

Concentrations: Florida (21.4%), California (12.5%) and Washington (10.1%). Loan originators: CBRE (31.5%), HSBC (12.7%), Berkadia (12.6%), Walker & Dunlop (9.5%), HFF (6%), Prudential (5%), Wells Fargo (4.5%), NorthMarq Capital (3.6%), PNC (2.5%), Magna Bank (2.4%), Beech Street Capital (2.3%), KeyCorp (2.1%), CWCapital (1.5%), Berkeley Point Capital (1.4%), Jones Lang LaSalle (1.2%), M&T Realty (0.6%) and Oak Grove Commercial Mortgage (0.5%).

Largest loans: A $66.8 million loan on the 558-unit Canyon Creek Apartments in Bothell, Wash.; a $62.6 million loan on the 294-unit Hudson Park North in Yon-kers, N.Y.; a $60.5 million loan on the 576-unit Lincoln Meadows in Schaumburg, Ill.; a $47.2 million loan on the 450-unit Seramonte Apartments in New Haven, Conn.; and a $40.5 million loan on the 448-unit Gardens East Apartments in Palm Beach Gardens, Fla.

B-Piece buyer: RiverBanc.

Notes: Freddie securitized 76 fixed-rate multi-family mortgages originated by 17 of its pre-approved lenders. Freddie guaranteed Classes A-1 and A-2 and floated them via a Freddie shelf. Classes B-D, which are unguaranteed, were placed privately. CMA code: 20120152 and 20120153.

Seller/borrower: Freddie Mac Lead managers: Wells Fargo,

Morgan Stanley Co-managers: Bank of America, Barclays, Deutsche Bank, Guggenheim Securities Master servicer: Wells Fargo

Special servicer: Wells Fargo

Trustee: U.S. Bank

Certificate administrator: U.S. Bank

Offering type: Fannie/Freddie/Ginnie

Amount Rating Rating Subord. Coupon Dollar Yield Maturity Avg. Life Spread

Class ($Mil.) (Fitch) (Kroll) (%) (%) Price (%) (Date) (Years) (bp) Note Type

A-1 110.000 AAA AAA 16.50 1.321 101.998 0.776 8/25/45 3.88 S+20 Fixed

A-2 1,042.049 AAA AAA 16.50 1.730 101.995 1.395 8/25/45 6.51 S+31 Fixed

B 89.680 A- A- 10.00 8/25/45 6.68 Fixed

C 34.493 BBB BBB+ 7.50 8/25/45 6.75 Fixed

D 103.478 NR NR 0.00 8/25/45 6.76 Fixed

X-1(IO) 1,152.049* AAA AAA 8/25/45 6.26 Fixed

X-2A(IO) 1,152.049* AAA AAA 8/25/45 6.26 Fixed

X-2B(IO) 227.651* NR AAA 8/25/45 6.73 Fixed

X-3(IO) 227.651* NR NR 8/25/45 6.73 Fixed

*Notional amount

(9)

November 9, 2012

_{Commercial Mortgage}

21

ALERT

INITIAL PRICINGS

NorthStar Mortgage Trust, 2012-1

Pricing date: Oct. 26 Property types: Retail (33.6%), mixed-use (19.2%), hotel (17%), office (16.6%) and multi-family (13.6%).

Concentrations: California (25.1%), Virginia (20.8%), New Jersey (17.2%), Texas (11.5%) and Colorado (10.1%).

Loan contributors: NorthStar (100%).

Largest loans: A $73 million loan to Coventry Real Estate on the Buena Park Mall and the Buena Park Place power center, encompassing 741,000 sf, in Buena Park, Calif.; a $60.4 million loan to Jack Morris and Joseph Marino on Towne Place at Garden State Park, a 336,000-sf retail and office complex in Cherry Hill, N.J.; a $43.3 million loan to Parmenter Realty Partners on the 486,000-sf SunTrust Center office complex and the adjacent 132,000-sf Mutual Building in Richmond, Va.; a $35.5 million loan to Windsor Capital on the 357,000-sf Citadel Crossing power center in Colorado Springs, Colo.; a $29.8 million loan to LTD Management on four hotels, encompassing 510 rooms, in Virginia; the $20.7 million senior portion of a $33.8 million loan to Gerald Sapp on the 192-room Embassy Suites in Kennesaw, Ga.; and a $20 million loan to Barry Nussbaum on three Houston apartment properties encompassing 1,014 units. Notes: NorthStar Realty Finance securitized 14 floating-rate loans, totaling $351.4 million, that it and an affiliated nontraded REIT, NorthStar Real Estate Income, origi-nated on transitional properties in 2011 and 2012. The transaction is the first with such collateral since the market crash. The loans have a weighted average coupon of Libor plus 534 bp, with individual spreads ranging from 259 bp to 750 bp. The bonds have a weighted average coupon of Libor plus 163 bp. The transaction’s weighted average loan-to-value ratio is 70.7%. NorthStar and its REIT retained Classes E-G and the interest-only strips. NorthStar said it expects to earn a yield of about 20% on the equity it has invested. See article in Oct. 19 issue. CMA code: 20120150.

Amount: $351.414 million

Seller/borrower: NorthStar Realty Finance Lead manager: Citigroup

Co-managers:

UBS, Barclays, Deutsche Bank Master servicer: Wells Fargo Special servicer: NorthStar Trust advisor: Situs Holding

Trustee: U.S. Bank

Certificate administrator: U.S. Bank Offering type: Rule 144A

Amount Rating Rating Subord. Coupon Dollar Maturity Avg. Life Spread

Class ($Mil.) (Moody’s) (S&P) (%) (%) Price (Date) (Years) (bp) Note Type

A 152.864 Aaa AAA 56.50 L+120 99.900 8/25/29 1.97 L+125 Floating

B 30.310 Aa2 AA 47.88 L+164.5 99.750 8/25/29 2.43 L+175 Floating C 24.160 A2 A 41.00 L+214.6 99.750 8/25/29 2.45 L+225 Floating D 20.206 Baa3 BBB- 35.25 L+424.5 99.750 8/25/29 2.51 L+435 Floating E 25.917 Ba2 BB 27.88 8/25/29 2.60 Floating F 12.299 B2 B 24.38 8/25/29 2.60 Floating G 85.658 NR NR 0.00 8/25/29 2.68 Floating

X-WAC(IO) 227.540* Baa3 BBB- 8/25/29 Floating

X-LF(IO) 351.414* NR NR 8/25/29 Floating

*Notional amount

(10)

WORLDWIDE CMBS

US CMBS

LOAN SPREADS

ASKING SPREADS OVER TREASURYS

ASKING OFFICE SPREADS

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 5 10 15 20 25 30 35 40 45 50 J F M A M J J A S O N D 2012 2011

MONTHLY ISSUANCE ($Bil.)

0 1 2 3 4 5 6 7 8 S O N D J F M A M J J A S O N Spread (bp) New Issue

Fixed Rate Avg. Week 52-wk (Conduit) Life 11/7 Earlier Avg. AAA _10.05.0 S+53 _S+94 S+50 _S+95 103 ₁₃₄ AA 10.0 S+194 S+189 265 A 10.0 S+260 S+255 370 BBB 10.0 S+427 S+420 556 Spread (bp) Legacy

Fixed Rate Avg. Week 52-wk (Conduit) Life 11/7 Earlier Avg. AAA _10.05.0 _S+146S+93 _S+143S+97 +158 ₊₂₀₈ AA 10.0 S+1,638 S+1,630 +1,947 A 10.0 S+2,247 S+2,237 +2,561 BBB 10.0 S+3,914 S+3,895 +4,193 Dollar Price Week 52-wk Markit CMBX 5 11/7 Earlier Avg. AAA 94.6 94.7 92.6 AA 45.5 45.7 45.4 A 26.8 27.1 30.3 BBB 17.7 17.8 18.1

BB 5.0 5.0 5.0

Sources: Trepp, Markit

Month 11/2 Earlier Office 220 225 Retail 207 206 Multi-family 198 208 Industrial 206 217 Source: Trepp 100 150 200 250 300 M J J A S O N 10-year loans with 50-59% LTV

CMBS TOTAL RETURNS

CMBS INDEX

Total Return (%) Avg. Month Year Since As of 11/7 Life to Date to Date 1/1/97

Inv.-grade 3.7 0.0 9.3 191.5 AAA 3.5 0.1 6.5 179.6 AA 4.0 0.1 11.2 79.8 A 3.9 0.0 13.0 63.3 BBB 4.2 0.0 18.4 65.0 Source: Barclays 0 3 6 9 12 15 18 J F M A M J J A S O N D 2012 2011 0 1 2 3 4 S O N D J F M A M J J A S O N

Rating Amount Spread CDS 11/2 Maturity (M/S) ($Mil.) (bp) (bp)

Kimco 10/19 Baa1/BBB+ 300 T+120 108 Simon Property 3/22 A3/A- 600 T+81 79 Equity Residential 12/21 Baa1/BBB+ 1,000 T+105 80 Prologis 3/20 Baa2/BBB- 540 T+163 159 AvalonBay 9/22 Baa1/BBB+ 450 T+113 70 Duke Realty 6/22 Baa2/BBB- 300 T+168 126 Boston Properties 2/23 Baa2/A- 1,000 T+130 87 Health Care Property 8/22 Baa2/BBB 300 T+158 112 Regency Centers 4/21 Baa2/BBB 250 T+147 Liquid REIT Average Baa1/BBB+ 527 T+132 103

Source: Wells Fargo

90 100 110 120 130 140 150 160 M J J A S O N

NEW-ISSUE SPREAD OVER SWAPS

CMBS SPREADS

10-Year AAA

WORLDWIDE CMBS ISSUANCE ($Bil.)

2011 2012

01/06/00 J 0.0 0.0 Year-to-date volume ($Bil.)

01/13/00 0.0 0.0 2012 2011 01/20/00 0.0 0.2 US 38.6 28.8 01/27/00 0.0 2.0 Non-US 4.3 3.3 02/03/00 F 0.4 2.0 TOTAL 42.9 32.1 02/10/00 0.4 2.6 02/17/00 5.2 3.2 02/24/00 6.6 3.2 03/02/00 M 6.6 4.3 03/09/00 8.1 5.4 03/16/00 8.5 6.4 03/23/00 8.6 6.8 03/30/00 10.0 7.0 04/06/00 A 10.0 7.6 04/13/00 10.2 7.8 04/20/00 10.3 9.8 04/27/00 10.9 11.1 05/04/00 10.9 12.7 05/11/00 M 10.9 12.8 05/18/00 10.9 15.3 05/25/00 11.1 15.8 06/01/00 14.1 16.0 06/08/00 14.1 17.3 06/15/00 J 16.0 17.3 06/22/00 18.8 19.0 06/29/00 19.5 20.2 07/06/00 19.5 20.2 07/13/00 J 19.5 22.1 07/20/00 20.2 23.6 07/27/00 22.2 24.7 08/03/00 23.7 25.0 08/10/00 A 23.7 26.3 08/17/00 25.6 26.6 08/24/00 25.6 26.6 08/31/00 25.8 27.0 09/07/00 26.0 27.0 09/14/00 S 26.0 30.2 09/21/00 28.5 32.6 09/28/00 30.3 35.1 10/05/00 30.3 37.7 10/12/00 30.9 37.7 10/19/00 O 30.9 39.3 10/26/00 30.9 39.6 11/02/00 31.0 42.6 11/09/00 32.1 42.9 11/16/00 32.3 11/23/00 N 33.4 11/30/00 33.4 12/07/00 33.8 12/14/00 35.9

MARKET MONITOR

Untitled-2 1 11/8/2012 2:33:10 PM

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THE GRAPEVINE

... From Page 1

November 9, 2012

_{Commercial Mortgage}

23

ALERT

high-yield mortgage program that,

among other things, invested in

mez-zanine loans and syndicated portions

of debt the insurer originated. MetLife

recently reshuffled some of its real

estate management ranks as it carved

out a third-party asset-management

business. McIntyre previously was head

of syndications for

KeyBank

_{and held}

executive positions at

GE Capital Real Estate

_and

UBS.

Managing director

Thomas Deane

_has

left

Wells Fargo

_{after taking a}

buy-out package. There’s no word on his

plans. Based in Charlotte, Deane ran

a dispositions unit within the bank’s

special-situations group that handles

foreclosed properties, note sales, joint

ventures, and other transactions

involv-ing commercial real estate assets. The

team also consults on loan workouts

and strategies for resolving troubled

assets. Deane was working for

Wachovia

when Wells took it over in 2008. He had

joined Wachovia in 2003 and served

as a senior executive in a number of

commercial real estate areas, including

special servicing.

Scott Moore

_{has joined}

CBRE

_{as senior}

vice president and head of

FHA

_loan

production for multi-family and

health-care properties. He’s in Columbus, Ohio,

but will relocate to Denver within a

year. Moore previously was a

manag-ing member at Columbus-based

Red

Mortgage Capital,

_{where he brokered}

FHA loans on healthcare properties. He

also had stints at

Ziegler Financing

_and

Lancaster Pollard Mortgage.

Miles Borden

_{joined law firm}

Seyfarth

Shaw

_{late last month as a partner in the}

firm’s real estate department. Borden

moved to the firm’s New York office

from his post as a partner at

Troutman

Sanders.

_{At Seyfarth, Borden represents}

lenders and borrowers on transactions

that include acquisitions, dispositions,

joint ventures and mortgage financing.

He reports to real estate group chair

Paul Mattingly.

Prime Finance

_{is looking for an}

execu-tive to work on structuring, negotiating

and closing loans. Candidates should

have a legal background, including at

least five years of experience in closing

mortgages on commercial properties.

The recruit would work at the fund

shop’s New York headquarters and

report to principal

Jon Brayshaw.

Raj Mehta

_{joined loan-software firm}

CJC

Technologies

_{of New York last month}

as director of client development. He

focuses on expanding the client base

for the firm’s origination and

asset-management software. Clients include

securitization shops, agency lenders,

credit unions and service-providers.

Mehta formerly worked at

J.P. Morgan

and

Credit Suisse.Situs

_{owns a stake in}

CJC, which is based in Franklin, Tenn.

Starwood Property

_{is looking for an}

analyst with 2-3 years of experience to

join its credit and underwriting team in

Los Angeles. Duties include modeling

property and loan cashflows, analyzing

profit and loss statements, reviewing

due-diligence materials, conducting

market research and preparing

presen-tations. Applicants may contact

Tessie

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Talmage thanks our speakers and clients who participated in our 2012 Credit Conference.

Your insights, contributions and ideas made the conference a great success. Thanks

also to our clients and partners for making 2012 one of our most successful years.

Talmage manages $1.7 billion in commercial real estate debt assets across the country

and operates a robust large loan Special Servicing platform. Since 2003, we have made

in excess of $10 billion of investments, acted as the Special Servicer on over $10 billion

of transactions and advised on over $30 billion of loan restructurings and modiﬁcations.

Talmage, LLC 430 Park Avenue New York, New York 10022 212.209.1388 talmagellc.com

TALMAGE 2012 CREDIT CONFERENCE AGENDA

The Election & The Economy - Perspectives from Kevin Warsh

Distinguished Visiting Fellow at the Hoover Institution and Lecturer at the Graduate School of Business, Stanford University

The Owner’s Perspective

Jeffrey Kelter - CEO, KTR Capital Partners

David Simon - Chairman & CEO, Simon Property Group

Barry Sternlicht - Chairman & CEO, Starwood Capital Group

Debt Investing and Lending Strategies Post Financial Crisis

Tobin Cobb - Co-CEO, LNR Property

Boyd Fellows - President, Starwood Property Trust

James Flaum - Managing Director, Morgan Stanley

Michael Nash - Senior Managing Director, The Blackstone Group

“Unintended Consequences” - Thoughts on the Economy, Ed Conard

Author of the New York Times best-selling book “Unintended Consequences” and former Bain Capital Partner

The LP Perspective - Opportunities in a New World

Nori Lietz - CEO, Areté Capital

Isabelle Scemama - Head of Commercial Real Estate Finance, AXA Real Estate

David Sherman - President & CIO, Metropolitan Real Estate Equity Management

“The Last Word” - Industry Leaders Share Thoughts on the Market

Michael Ashner - Chairman & CEO, Winthrop Realty Trust

Barry Blattman - 6HQLRU0DQDJLQJ3DUWQHU%URRNÀHOG$VVHW0DQDJHPHQW

Ron Kravit - Senior Managing Director, Cerberus Capital Management