Commercial/Multifamily Originations Experience Seven Percent Quarterly Drop
Commercial/multifamily originations during the fourth quarter of 2011 were up 13 percent over the fourth quarter of 2010, but fell seven percent from the third quarter of 2011, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The 13 percent overall increase in commercial/multifamily lending activity over the fourth quarter of 2010 was driven by increases in originations for industrial and multifamily property types. The increase included a 43 percent increase in loans for industrial properties, a 31 percent increase in loans for multifamily properties, an eight percent decrease in loans for retail properties, a 24 percent decrease in loans for healthcare properties, a 29 percent decrease in office property loans and a 44 percent decrease in hotel property loans. "MBA's Commercial/Multifamily Mortgage Bankers Origination Index hit record levels for life insurance companies in the second and third quarters of 2011," said Jamie Woodwell, MBA's VP of commercial real estate research. "In the fourth quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new all-time high. While the CMBS market continued to be held back by broader capital markets uncertainty during the past year, others—like the GSEs, life companies and many bank portfolios—increased their appetite for commercial and multifamily loans." Among investor types, loans for commercial bank portfolios increased by 122 percent compared to last year's fourth quarter. There was also a 17 percent increase in loans for government-sponsored enterprises (GSEs), a 13 percent decrease in loans for life insurance companies and a 50 percent decrease in loans for conduits for CMBS. Q4 2011 commercial and multifamily mortgage originations were seven percent lower than originations in Q3 of 2011. Compared to the third quarter, Q4 originations for hotel properties saw a 52 percent decrease. There was a 39 percent decrease for office properties, a 24 percent decrease for retail properties, a 29 percent increase for multifamily properties, a 51 percent increase for industrial properties, and a 153 percent increase for health care properties. Among investor types, between Q3 and Q4 of 2011, loans for conduits for CMBS saw a decrease in loan volume of 26 percent, loans for life insurance companies saw a decrease in loan volume of 23 percent, originations for commercial bank portfolios decreased 16 percent and loans for GSEs increased by 34 percent.