Money Flowing to US Apartment Projects

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Commercial and multifamily mortgage origination volumes jumped in the U.S. in the second quarter, primarily due to interest in apartment projects, according to data released today by the Mortgage Bankers Association.

Origination volumes were 36 percent higher than the first quarter of 2013 and 7 percent more than the same quarter of 2012, the MBA found.

The jump was led by a 31 percent increase in the dollar volume of loans for multifamily properties compared to the second quarter of 2012. In contrast, hotel properties posted a three percent increase, while there was a 14 percent decrease for retail properties, a 36 percent decrease for health care properties, and office and industrial properties remained unchanged when compared to the second quarter of 2012.

"The apartment market continues to be the belle of the ball," said Jamie Woodwell, MBA's vice president of commercial real estate research. "After a slow start to the year, lending by life insurance companies surged in the second quarter to record the highest quarterly volume on record for that sector."

There was a pick-up in hotel and office property deals in the second quarter. Compared to the first quarter, originations for hotel properties saw an 89 percent increase and office properties jumped 75 percent. In the second quarter, there was a 48 percent increase for retail properties, a 44 percent increase for industrial properties and a 22 percent increase for multifamily properties

Year to date commercial and multifamily mortgage originations were 8 percent higher than originations during the same period of 2012, MBA reports.