MBA: Commercial, Multifamily Originations Fell 46% In

Commercial and multifamily mortgage origination volumes decreased 46% in 2009 among repeat reporters, with mortgage bankers reporting $82.3 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association's (MBA) 2009 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.

Commercial banks and savings institutions were the largest single investor group for commercial and multifamily mortgages – responsible for $19.8 billion, or 24%, of the closed-loan volume. Multifamily properties were the dominant property type, representing $36.5 billion, or 44% of the lending total. Office properties took the next largest share ($13 billion, 16%), followed by retail properties ($9.9 billion, 12%), industrial properties ($6.9 billion, 8%), healthcare ($5.1 billion, 6%) and hotel/motel ($4.7 billion, 6%). There was $6.3 billion of loans backed by other property types last year.

"Relatively few commercial mortgages were made in 2009, as the recession curtailed both the supply of and demand for new mortgage debt," says Jamie Woodwell, MBA's vice president of commercial real estate research. "As the recession has receded, origination volumes have picked up slightly, but the absolute levels remain low."

Decreases were seen across most property types and investor groups, and were led by declines in loans intended for credit companies; real estate investment trusts (REITs), mortgage REITs and investment funds; and commercial mortgage-backed securities, collateralized debt obligations and other asset-backed security conduits.

Loans for Fannie Mae and Freddie Mac accounted for 85% of the total reported multifamily volume in 2009, with $15.9 billion of multifamily loans closed for Fannie Mae (a 32% decline from 2008) and $15.2 billion of loans closed for Freddie Mac (a 24% decline).

The Federal Housing Administration/Ginnie Mae saw a 168% increase in loans closed from 2008, with 2009's loans totaling $5.8 billion.

Lending for office properties had the largest percentage decrease in originations by property type, the MBA adds, followed closely by retail properties and hotels/motels.

SOURCE: Mortgage Bankers Association


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