U.S. Commercial, Multifamily Mortgage Originations Spike 49% in Q4

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According to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage originations increased 49 percent between the third and the fourth quarters of 2012, and were also up 49 percent compared to the fourth quarter of 2011. MBA's commercial/multifamily mortgage bankers originations index shows originations for the full year 2012 were 24 percent higher than in 2011.
 
"During the fourth quarter, commercial and multifamily mortgage borrowing and lending hit the highest level since 2007," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "Low interest rates are prompting borrowers to finance, and improving property markets are helping more deals underwrite successfully.  The relative strength of commercial and multifamily mortgages as investments continues to fuel lenders' appetites."
 
The 49 percent overall increase in commercial/multifamily lending volume, when compared to the fourth quarter of 2011, was driven by increases in originations for hotel and office properties. The increase included a 331 percent increase in the dollar volume of loans for hotel properties, a 78 percent increase for office properties, a 49 percent increase for multifamily properties, a 46 percent increase for industrial properties, a five percent increase in retail property loans and a 26 percent decrease in health care loans.
 
Among investor types, the dollar volume of loans originated for conduits for CMBS increased by 228 percent over last year's fourth quarter. There was a 68 percent increase for commercial bank portfolio loans, a 51 percent increase for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac), and there was an 18 percent increase in the volume of loans originated for life insurance companies.
 
Fourth quarter 2012 commercial and multifamily mortgage originations were 49 percent higher than originations in the third quarter of 2012. Fourth quarter originations for hotel properties increased 99 percent compared to the third quarter. There was an 86 percent increase for industrial properties, a 57 percent increase for health care properties, a 48 percent increase for multifamily properties, a 44 percent increase for office properties and a 22 percent increase for retail properties.
 
Among investor types, between the third and fourth quarters of 2012, loans for conduits for CMBS saw an increase in loan volume of 141 percent, loans for GSEs saw an increase in loan volume of 54 percent, originations for life insurance companies increased 33 percent and loans for commercial bank portfolios increased by 32 percent.
 
Based on MBA's commercial and multifamily mortgage bankers originations index, full year 2012 commercial and multifamily mortgage originations were 24 percent higher than originations during the full year of 2011. Full year originations for hotel properties increased 61 percent. There was a 36 percent increase for multifamily properties, a 19 percent increase for retail properties, a 10 percent increase for industrial properties, a nine percent increase for office properties and a six percent increase for health care properties.
 
Among investor types, for the full year 2012 versus 2011, commercial bank portfolios saw an increase in loan originations of 51 percent, loans for conduits for CMBS saw an increase in loan volume of 45 percent, originations for GSEs increased 43 percent and loans for life insurance companies were unchanged.