U.S. Commercial Mortgage Originations Up 49 Percent Year-Over-Year

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According to the Mortgage Bankers Association's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, first quarter 2015 commercial and multifamily mortgage loan originations were 49 percent higher than during the same period last year. Following the usual seasonal pattern, first quarter 2015 originations saw a 26 percent decrease from the fourth quarter of 2014.

"The year-end momentum from 2014 carried into the first quarter of 2015, with year-over-year growth in lending for every major property type," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Multifamily lending was a key driver of first quarter originations and the GSEs drove multifamily. The GSEs' multifamily originations increased by 306 percent compared to Q1 2014, marking their second highest quarter on record, while multifamily originations for other capital sources appear to have remained flat or declined."

Q1, 2015 Originations 49 Percent Higher Than Q1, 2014

Increases in originations for industrial and multifamily properties led the overall increase in commercial/multifamily lending volumes when compared to the first quarter of 2014. The increase included a 269 percent increase in the dollar volume of loans for industrial properties, a 71 percent increase for multifamily properties, a 53 percent increase for office properties, a 51 percent increase for hotel properties, and a five percent increase in retail property loans. Health care property loans were essentially unchanged year-over-year.

Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) increased by 306 percent from last year's first quarter. There was a 113 percent increase for Commercial Mortgage Backed Securities (CMBS) loans, a 51 percent increase for life insurance company loans, and a one percent decrease in dollar volume for commercial bank portfolio loans.

Q1, 2015 Originations Down 26 Percent from Q4, 2014

First quarter 2015 originations for health care properties decreased 62 percent compared to the fourth quarter 2014. There was a 57 percent decrease in originations for retail properties, a 33 percent decrease for hotel properties, a 31 percent decrease for multifamily properties, a 25 percent decrease for office properties, and a 127 percent increase for industrial properties from the fourth quarter 2014.

Among investor types, between the fourth quarter of 2014 and first quarter of 2015, the dollar volume of loans for commercial bank portfolios decreased 23 percent, loans for life insurance companies decreased 18 percent, originations for CMBS decreased 14 percent, and loans for GSEs decreased by 13 percent.