Commercial and multifamily mortgage loan origination volume dropped 45% in the first quarter compared to the fourth quarter of 2013, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. However, volume was down only 1% compared to the first quarter of 2013.
In a release, Jamie Woodwell, vice president of commercial real estate research for the MBA, pointed out that the year-over-year comparison is more important, as ‘Commercial and multifamily borrowing typically starts the year slowly, with less than one-fifth of the annual volume usually done in the first quarter.’
‘Lending by banks and life companies increased compared to last year's first quarter, but first quarter originations for Fannie Mae and Freddie Mac and for inclusion in commercial mortgage-backed securities (CMBS) were lower than during the same period last year,’ Woodwell says. ‘Taken together, commercial and multifamily mortgage originations started 2014 at the same pace they started 2013.’
The year-over-year drop of 1% was driven mainly by the decrease in originations for retail and multifamily properties. There was a 19% drop in the dollar volume of loans for retail properties and a 17% decline for multifamily properties – however, these declines were offset by a 10% increase in loans for health care properties, 15% increase for office properties, 44% increase in hotel property loans and 52% increase in industrial property loans.
Among investor types, the dollar volume of loans originated for the government-sponsored enterprises, Fannie Mae and Freddie Mac, decreased by 55% from last year's first quarter. There was a 21% decrease for CMBS, an 18% increase for life insurance company loans and a 55% increase in dollar volume of loans for commercial bank portfolios.
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