Commercial, multi-family originations set record in Q2MortgagePress.comCommercial multi-family originations
Commercial and multi-family mortgage bankers' loan originations
set a new record during the second quarter of 2005, according to
the Mortgage Bankers Association (MBA). The $44.4 billion in loan
originations reported for the second quarter was 25 percent higher
than the second quarter of 2004 and 41 percent higher than the
first quarter of 2005. Second quarter originations were also four
percent higher than the fourth quarter of 2004, which had
previously been the largest single quarter for originations
volume.
MBA also reported that year-to-date loan originations were 31
percent higher than they were during the second quarter of last
year.
The increase in commercial/multi-family lending activity was
across all property types. The $8.9 billion increase over the
second quarter of 2004 included a 26 percent increase in loans for
office buildings, a 14 percent increase in loans for multi-family
properties, a 27 percent increase in loans for retail and a 34
percent increase in loans for industrial space. The largest
increase in lending was for hotel properties, which saw a 189
percent increase from the second quarter 2004.
Among investor types, commercial banks and commercial
mortgage-backed securities (CMBS) conduits drove the overall
increase. Mortgage bankers' originations for conduits increased 91
percent from the second quarter of 2004, originations for
commercial banks increased by 83 percent and originations for life
insurance companies increased three percent.
Originations decreased for Fannie Mae by 13 percent, for Freddie
Mac by 47 percent, for FHA by 34 percent, and for pension funds by
75 percent.
Multi-family was again the dominant property type, representing
35 percent of total second quarter 2005 originations. Office
properties were the next most active property group, with 24
percent of the total, followed by retail properties, with 18
percent of the total.
CMBS conduits purchased the largest share of loans originated
during the second quarter, 43 percent of the quarter's total.
Originations for commercial banks were 23 percent of the total,
loans for life insurance companies were 18 percent of the total,
and the combined originations for Fannie Mae and Freddie Mac were
11 percent of the total.
The $12.9 billion increase in lending activity between the first
and second quarters of 2005 reflects the industry's usual rise in
originations as the year progresses. The quarter-over-quarter
increase was led by large increases in multi-family, office and
retail lending, which grew by 32 percent, 44 percent and 62
percent, respectively. The gains were widespread, with all property
types and almost all investor types recording increase.
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