Commercial, Multifamily Mortgage Originations Tick Upward in Q2 ’10


Though volume remains low on an absolute level, commercial and multifamily mortgage loan originations seem to be on the journey upward.

According to the Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations released Wednesday by the Mortgage Bankers Association (MBA), second quarter 2010 commercial and multifamily mortgage loan originations inched up 1 percent from the same period last year and surged 35 percent from the first quarter of this year.

“Borrowing remains light as few commercial property owners are selling or refinancing their properties unless they have to,” said Jamie Woodwell, MBA’s VP of commercial real estate research. “Life insurers, [commercial mortgage-backed securities] (CMBS) conduits and others are back in the market and lending, and rates are at extremely attractive levels. However, low volumes of property sales, depressed property values, stressed cash flows, and modest loan maturities are all keeping borrowing to a minimum.”

MBA said the 1 percent year-over-year increase was driven by an uptick in originations for office and industrial properties. When compared to the second quarter of 2009, the increase included a 183 percent surge in loans for industrial properties, a 180 percent escalation in loans for office properties, and an 18 percent jump in loans for hotel properties. But during the same period, loans for health care properties plummeted 76 percent, multifamily property loans tumbled 25 percent, and retail property loans fell 9 percent.

Among investor types, loans for conduits for CMBS saw an increase of 173 percent compared to the second quarter of 2009, and there was also a 148 percent increase in loans for life insurance companies. However, loans for commercial bank portfolios fell by 12 percent, and the dollar volume of loans for Fannie Mae and Freddie Mac plummeted 55 percent.

While second quarter originations inched up just slightly from last year, the quarter-over-quarter increase was more notable. The overall 35 percent jump in originations from the first quarter to the second quarter of this year included a 405 percent surge in loans for hotel properties, a 114 percent uptick in loans for industrial properties, a 107 percent escalation in loans for health care properties, a 56 percent increase in loans for office properties, and a 38 percent rise in loans for multifamily properties. The only quarter-to-quarter decrease was seen in originations for retail properties, which fell 11 percent.

As for investor types, loans for conduits for CMBS saw an increase in loan volume of 106 percent compared to the previous quarter, loan volume for life insurance companies soared 57 percent, and originations for GSEs jumped 21 percent. During the same period, loans for commercial bank portfolios edged down 2 percent.

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