According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, first quarter 2014 commercial and multifamily mortgage loan originations were one percent lower than during the same period last year and 45 percent lower than the fourth quarter of 2013.
“Commercial and multifamily borrowing typically starts the year slowly, with less than one-fifth of the annual volume usually done in the first quarter,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “This year is looking to continue the trend. Lending by banks and life companies increased compared to last year’s first quarter, but first quarter originations for Fannie Mae and Freddie Mac and for inclusion in commercial mortgage-backed securities (CMBS) were lower than during the same period last year. Taken together, commercial and multifamily mortgage originations started 2014 at the same pace they started 2013.”
First Quarter 2014 Originations One Percent Lower than First Quarter 2013
The one percent overall decrease in commercial/multifamily lending volumes, when compared to the first quarter of 2013, was driven by the decrease in originations for retail and multifamily properties. The decrease included a 19 percent decrease in the dollar volume of loans for retail properties, a 17 percent decrease for multifamily properties, a 10 percent increase for health care properties, a 15 percent increase for office properties, a 44 percent increase in hotel property loans, and a 52 percent increase in industrial property loans.
Among investor types, the dollar volume of loans originated for Government Sponsored Enterprise (or GSE – Fannie Mae and Freddie Mac) decreased by 55 percent from last year’s first quarter. There was a 21 percent decrease for CMBS, an 18 percent increase for life insurance company loans and a 55 percent increase in dollar volume of loans for commercial bank portfolios.
First Quarter 2014 Originations Down 45 Percent from Fourth Quarter 2013
First quarter 2014 commercial and multifamily mortgage originations were 45 percent lower than in the fourth quarter of 2013. Compared to the fourth quarter of 2013, first quarter 2014 originations for health care properties decreased 65 percent. There was a 53 percent decrease in originations for retail properties, a 51 percent decrease for hotel properties, a 50 percent decrease for office properties, a 44 percent decrease for multifamily properties, and a 24 percent decrease for industrial properties from the fourth quarter 2013 to the first quarter 2014.
Among investor types, between the fourth quarter of 2013 and first quarters of 2014, the dollar volume of loans for CMBS decreased 57 percent, loans for GSEs decreased 53 percent, originations for life insurance companies decreased 42 percent, and loans for commercial bank portfolios decreased by 28 percent.