U.S. Commercial, Multifamily Mortgage Originations Down 7% in Q3 Over Last Year

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According to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage origination volumes during the third quarter of 2012 were seven percent lower than during the third quarter 2011, 17 percent lower than during the second quarter of 2012 and up 15 percent year-to-date from last year's year-to-date levels.
 
"Commercial and multifamily mortgage borrowing slowed in the third quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "Even though low interest rates continue to make borrowing extremely attractive, a moderate pace of commercial property sales transactions and a continued drop in the volume of commercial mortgages maturing limited the overall amount of commercial mortgage loans originated."
 
The seven percent overall decrease in commercial/multifamily lending volume, when compared to the third quarter of 2011, was driven by decreases in originations for retail and office properties. The decrease included a 35 percent decrease in the dollar volume of loans for retail properties, a 24 percent decrease for office properties, a four percent increase for hotel properties, a 19 percent increase for industrial properties, a 19 percent increase in health care property loans and a 30 percent increase in multifamily loans.
 
Among investor types, the dollar volume of loans for life insurance companies decreased by 32 percent over last year's third quarter. There was an eight percent increase for commercial bank portfolios and a 30 percent increase for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac). There was no change in volume of loans originated for conduits for CMBS.
 
Third quarter 2012 commercial and multifamily mortgage originations were 17 percent lower than originations in the second quarter of 2012. Compared to the second quarter, third quarter originations for retail properties saw a 43 percent decrease. There was a 29 percent decrease for office properties, a 25 percent decrease for health care properties, a 12 percent decrease for hotel properties, a seven percent increase for multifamily properties and an eight percent increase for industrial properties.
 
Among investor types, between the second and third quarters of 2012, loans for conduits for CMBS saw a decrease in loan volume of 55 percent, loans for life insurance companies saw a decrease in loan volume of 37 percent, originations for commercial bank portfolios increased six percent and loans for GSEs increased by 14 percent.
 
Year-to-date 2012 commercial and multifamily mortgage originations were 15 percent higher than originations during the same time period of 2011. Compared to 2011, year-to-date originations for health care properties saw a 33 percent increase. There was a 30 percent increase for multifamily properties, a 24 percent increase for retail properties, an eight percent increase for hotel properties, a seven percent decrease for office properties and a seven percent decrease for industrial properties.
 
Among investor types, year-to-date 2012 versus the same time period in 2011, loans for commercial bank portfolios saw an increase in loan volume of 44 percent, loans for GSEs saw an increase in loan volume of 39 percent, originations for conduits for CMBS increased seven percent and loans for life insurance companies decreased by six percent.