2006 commercial/multi-family originations up 10 percentMortgagePress.comMortgage Bankers Association, commercial mortgage-backed securities, collateralized debt obligations, asset-backed securities The commercial/multi-family originations market grew 10 percent in 2006, with mortgage bankers closing $406.1 billion in commercial/multi-family loans according to the Mortgage Bankers Association (MBA) 2006 Commercial Real Estate/Multi-Family Finance: Annual Origination Volume Summation. Increases were seen across every property type, as well as most investor groups, and were led by increases in loans for office buildings and loans intended for commercial bank and savings institution portfolios. "The $406 billion in originations volume in 2006 marked a new high," noted Jamie Woodwell, MBA's senior director of commercial/multi-family research. "Conduits packaging loans for commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset-backed securities (ABS) continued to be the dominant investor group in 2006, and office properties surpassed multi-family as the dominant property type." The increase in originations from 2005 to 2006 was driven by both higher loan amounts - with the average loan size rising to $11.5 million - and by a greater number of loans being closed. Loan amounts rose in tandem with property valuations - valuations that increased both in the property sales market and in loan underwriting. In general, the availability of funds for commercial/multi-family real estate has been part of an economy-wide availability of capital. CMBS, commercial real estate CDOs and ABS were the largest single investor group for these mortgages - buying $185.6 billion, or 46 percent of the closed loan volume. Office buildings were the dominant property type - representing $104 billion, or 26 percent of the lending total. Among major investor groups, real estate investment trusts saw the greatest percentage increase in volume between 2005 and 2006, followed by commercial banks/thrifts, Freddie Mac, life insurance companies, Fannie Mae and CMBS, as well as CDO and other ABS conduits. Lending for multi-family properties, which had been the leading property type for originations in 2005, fell to second behind office property originations. Lending to multi-family properties grew by just one percent between 2005 and 2006. Lending for office properties, retail, industrial, hotel/motel and health care all saw greater growth. Intermediated loan volume and closed loan volume each grew at the same 10 percent rate between 2005 and 2006. Seconds/mezzanine/preferred-equity financing grew by 21 percent. For more information, visit www.mbaa.org.