Commercial, Multifamily Mortgage Loan Originations in Q1 Up 36% Over Last Year

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According to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, first quarter 2012 commercial and multifamily mortgage loan originations were 36 percent higher than during the same period last year and 12 percent lower than the fourth quarter of 2011,

The decrease from fourth quarter 2011 reflects the industry's usual push to finalize deals before the end of the year, and subsequent drop-offs in first quarter numbers.

"Borrowing and lending on commercial and multifamily properties continues to rebound from the lows seen during the Great Recession," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "The low interest rates and stabilization in commercial real estate fundamentals that raised origination levels by 55 percent in 2011 are continuing to buoy activity in 2012."

The 36 percent overall increase in commercial/multifamily lending activity during the first quarter of 2012, over the same period in 2011, was driven by increases in originations of loans for health care, retail and multifamily properties.  When compared to the first quarter of 2011, the increase included a 118 percent increase in loans for health care properties, a 109 percent increase in loans for retail properties, a 45 percent increase in loans for multifamily properties, a 7 percent decrease in loans for hotel properties, a 9 percent decrease in office property loans and a 32 percent decrease in industrial property loans.

Among investor types, loans for commercial bank portfolios increased by 104 percent compared to last year's first quarter.  There was also a 40 percent increase in loans for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac), a 10 percent increase in loans for life insurance companies and a 10 percent decrease in loans for conduits for CMBS.

First quarter 2012 commercial and multifamily mortgage originations were 12 percent lower than originations in the fourth quarter of 2011. Compared to the fourth quarter of 2011, first quarter 2012 originations for retail properties saw a 17 percent increase. There was a 4 percent increase for office properties, a one percent decrease for hotel properties, a 22 percent decrease for multifamily properties, a 50 percent decrease for industrial properties and a 53 percent decrease for health care properties.

Among investor types, between the fourth quarter of 2011 and the first quarter of 2012, loans for commercial bank portfolios saw an increase in loan volume of 11 percent, loans for life insurance companies saw an increase in loan volume of 2 percent, originations for conduits for CMBS decreased 25 percent and loans for GSEs decreased by 33 percent.