MBA study: Commercial and multifamily originations remained low in Q3

Commercial and multifamily mortgage loan originations for the third quarter of 2009 were 12 percent lower than during the second quarter of 2009, and 54 percent 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," said 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 percent 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 percent decrease in loans for retail properties, a 59 percent decrease in loans for healthcare properties, a 58 percent decrease in loans for industrial properties, a 56 percent decrease in loans for office properties, a 46 percent decrease in hotel property loans, and a 40 percent decrease in multifamily property loans. Among investor types, loans for conduits for commercial mortgage-backed securities (CMBS) saw a decrease of 90 percent compared to last year's third quarter. There was also a 58 percent decrease in loans for life insurance companies, a 52 percent decrease in loans for commercial bank portfolios, and the dollar volume of loans for government-sponsored enterprises (or GSEs - Fannie Mae and Freddie Mac) saw a decrease of 31 percent. Third quarter 2009 mortgage originations were 12 percent lower than originations in the second quarter. Among investor types, loans for conduits for CMBS saw a decrease in loan volume of 50 percent compared to the second quarter, loans for GSEs' saw a decrease in loan volume of 24 percent compared to second quarter 2009, commercial bank portfolios increased by 27 percent during the same time span, and originations for life insurance companies increased 17 percent from the second quarter to third quarter 2009. Compared to the second quarter of 2009, third quarter originations for office properties saw a 65 percent increase. There was a 49 percent increase for industrial properties, a 32 percent decrease for hotel properties, an 18 percent decrease for health care properties, a 17 percent decrease for multifamily properties, and a 14 percent decrease for retail properties. To view the report, click here. For more information, visit www.mortgagebankers.org.