Mortgage bankers originated $110 billion of commercial and multifamily mortgages during 2010 – an increase of 36% from 2009 – according to preliminary estimates based on the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
The MBA recorded an 88% overall increase in commercial/multifamily lending activity between the fourth quarter of 2009 and the fourth quarter of 2010, which was attributed to increases in originations for office and hotel properties. When compared to the fourth quarter of 2009, the MBA found the increase included a 170% increase in loans for office properties; a 169% increase in loans for hotel properties; a 98% increase in loans for industrial properties; a 94% increase in loans for retail properties; an 81% increase in multifamily property loans; and a 4% increase in healthcare property loans.
Life insurance companies were a leading source of lending in 2010, with origination volumes 155% higher than 2009 levels. Originations for commercial banks saw a year-over-year decline, while originations for commercial mortgage-backed securities conduits increased more than tenfold.
Among investor types, loans for conduits for commercial mortgage-backed securities (CMBS) saw a 60-fold increase compared to last year's fourth quarter. There was also a 170% increase in loans for life insurance companies, a 65% increase for the government-sponsored enterprises (GSEs), and a 25% decrease for loans originated for commercial bank portfolios.Â
The MBA also determined that changes between the third and fourth quarters of 2010 were likely driven, at least in part, by seasonal factors. Among investor types, fourth-quarter loans for conduits for CMBS saw an increase in loan volume of 298% compared to the third quarter, while originations for commercial bank portfolios increased 102% the third quarter to the fourth quarter of 2010. Loans for GSEs saw an increase in loan volume of 68%, and loans for life insurance companies increased by 42% during the same time span.
Compared to the third quarter, fourth quarter originations for hotel properties saw a 333% increase. There was a 204% increase for healthcare properties, a 119% increase for retail properties, a 76% increase for office properties, a 38% increase for multifamily properties and a 3% increase for industrial properties during this period.
Separately, the MBA predicted that out of the $1.4 trillion balance of outstanding commercial/multifamily mortgages held by nonbank investors, only 11% of the total, or $155 billion, will mature in 2011, and 9%, or $125 billion, will mature in 2012.
‘The long-term nature of commercial real estate means that relatively fewer – not more – commercial and multifamily mortgages have been maturing during the throes of the credit crunch and recession compared to other credit types,’ says Jamie Woodwell, the MBA's vice president of commercial real estate research. ‘For most investor groups, commercial mortgage maturities are relatively spread out, with some increases starting in 2015 as the loans originated in 2005, 2006 and 2007 come due.’
SOURCE: Mortgage Bankers Association
