Originations set new record in 2005MortgagePress.comRecord mortgage originations
Commercial and multi-family mortgage bankers' loan originations
set a new record during 2005 according to the Mortgage Bankers
Association (MBA). Originations reported in 2005 were 48 percent
higher than in 2004. The increase in 2005 was led by substantial
gains among all property types, while commercial mortgage-backed
securities (CMBS) conduits, commercial banks, life insurance
companies and Fannie Mae led the increases among investor
types.
MBA also reported that loan originations in the fourth quarter
were the highest ever recorded in MBA's quarterly survey. Fourth
quarter origination volume was 16 percent higher than the previous
quarter.
"2005 was another record year for commercial and multi-family
originations, with growth seen among almost all property and
investment types," noted Douglas G. Duncan, MBA chief economist and
senior vice president of research and business development. "The
favorable conditions that led to records in 2005, such as continued
low interest rates, an abundance of capital and a strong economy,
should remain strong, as we progress through 2006.
Year-over-year gains in nearly every
category
Originations by commercial/multi-family mortgage bankers during
2005 were 48 percent higher than in 2004, led by loans for hotel
and industrial properties and CMBS conduit investors.
Originations of multi-family loans increased by 44 percent in
2005 compared to 2004, while lending for office properties
increased 46 percent and for retail by 34 percent. Lending for
hotels grew by 230 percent.
Loan originations for commercial banks in 2005 increased by 60
percent, for CMBS by 83 percent and for life insurance companies by
25 percent. Calendar year originations for Fannie Mae increased 25
percent compared to 2004, while originations for Freddie Mac, the
Federal Housing Administration (FHA) and pension funds each
fell.
Multi-family was again the dominant property type, representing
36 percent of total 2005 originations. Office properties were the
next most active property group, with 24 percent of the total,
followed by retail properties, with 17 percent.
CMBS conduits purchased the largest share of loans originated
during 2005, 38 percent of the year's total. Originations for
commercial banks were 21 percent of the total, loans for life
insurance companies 18 percent of the total and the combined
originations for Fannie Mae and Freddie Mac 12 percent of the
total.
Fourth quarter 2005 increases 58 percent from fourth
quarter 2004
The increase in commercial/multi-family lending activity during the
fourth quarter was across all property types. The increase over the
fourth quarter of 2004 included a 65 percent increase in loans for
office buildings, a 62 percent increase in loans for multi-family
properties, a 63 percent increase in loans for retail and an 88
percent increase in loans for industrial space. The largest
percentage increase in lending was for hotel properties, which saw
a 112 percent increase from the fourth quarter 2004.
Among investor types, commercial banks, life insurance companies
and CMBS conduits drove much of the overall increase, although
lending activity increased among almost all types. Mortgage
bankers' originations for conduits increased 53 percent from the
fourth quarter of 2004; originations for commercial banks increased
by 70 percent and originations for life insurance companies
increased 46 percent. Originations for Fannie Mae increased 63
percent, originations for Freddie Mac increased two percent,
originations for FHA increased 32 percent, and originations for
pension funds dropped by four percent from the fourth quarter of
2004.
Fourth quarter 2005 increases 16 percent from third
quarter 2005
The 16 percent increase in lending activity in the fourth quarter
built on the third quarter's record origination volume. The
quarter-over-quarter increase was led by large increases in
multi-family, office and retail lending, which grew by 31 percent,
16 percent and 32 percent, respectively. The gains were widespread,
with most property types and most investor types recording
increases.
MBA's quarterly commercial and multi-family survey of mortgage
banks captured $67.5 billion in loans originations, during the
fourth quarter of 2005, and $201.7 billion, during the entire
year.
For more information, visit www.mortgagebankers.org.
