Commercial and multifamily mortgage loan originations in the first quarter were 12% higher than during the same period last year and 26% lower than during the fourth quarter of 2009, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
‘The results of the survey showed changes in commercial and multifamily origination levels varied significantly between investor groups,’ says Jamie Woodwell, the MBA’s vice president of commercial real estate research. ‘However, it's hard to draw conclusions based on first-quarter numbers given seasonal effects, such as the industry's usual push to finalize deals before the end of the year, resulting in lower first-quarter origination activity.’
Woodwell adds that, based on discussions with lenders and surveys from the Federal Reserve Board, the amount of capital available to commercial mortgages appears to be increasing, while the demand for new mortgages from commercial and multifamily property investors is limited.
The 12% year-over-year increase in lending activity during the first quarter was driven by increases in originations for office and retail properties. When compared to the first quarter of 2009, the increase included a 98% increase in loans for retail properties and a 29% increase in loans for office properties.
All other major property types saw decreases, however, with hotel and healthcare property originations taking the largest hits: 46% and 68% decreases, respectively.. Multifamily originations fell 5%, and industrial originations dropped 28%.
Among investor types, loans for conduits for commercial mortgage-backed securities (CMBS) saw an increase of 657% compared to last year's first quarter. There was also a 131% increase in loans for life insurance companies and a 4% decrease in loans for commercial bank portfolios, and the dollar volume of loans for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac saw a decrease of 49%.
Compared to the fourth quarter of 2009, loans for conduits for CMBS increased in loan volume by 430%. Loans for life insurance companies saw an increase in loan volume of 1% compared to the fourth quarter of 2009, commercial bank portfolios decreased by 48% during the same time span, and originations for the GSEs decreased 43%.
SOURCE: Mortgage Bankers Association