Commercial and multifamily mortgage loan originations for the third quarter of this year were 12% lower than during the second quarter, and 54% lower than during the same period last year, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
‘Tight credit conditions, coupled with scant demand for new loans, meant that commercial and multifamily mortgage originations remained low in the third quarter,’ says Jamie Woodwell, MBA's vice president of commercial real estate research. ‘A pull-back by Fannie Mae and Freddie Mac in their multifamily activity outweighed increases in commercial/multifamily lending by life insurance companies and commercial banks, leading the overall index lower on a quarter-over-quarter basis. Every investor group and property type saw year-over-year declines in origination volume.’
The 54% overall decrease in commercial/multifamily lending activity during the third quarter was driven by year-over-year decreases in originations for all property types. When compared to the third quarter of 2008, the decrease included a 62% decrease in loans for retail properties, a 59% decrease in loans for healthcare properties, a 58% decrease in loans for industrial properties, a 56% decrease in loans for office properties, a 46% decrease in hotel property loans and a 40% decrease in multifamily property loans.
Among investor types, loans for conduits for commercial mortgage-backed securities (CMBS) saw a decrease of 90% compared to last year's third quarter. There was also a 58% decrease in loans for life insurance companies and a 52% decrease in loans for commercial bank portfolios, and the dollar volume of loans for Fannie Mae and Freddie Mac saw a decrease of 31%.
From the second to third quarter, loans for conduits for CMBS saw a decrease in loan volume of 50%, loans for Fannie Mae and Freddie Mac saw a decrease in loan volume of 24%, commercial bank portfolios increased by 27% and originations for life insurance companies increased by 17%.
Compared to the second quarter, third-quarter originations for office and industrial properties increased 65% and 49%, respectively. Hotel property originations dropped 32% in the same time period, healthcare property originations dropped 18%, multifamily originations fell 17% and retail originations dipped 14%.
SOURCE: Mortgage Bankers Association