“The results of the survey showed changes in commercial and multifamily origination levels varied significantly between investor groups. However, it’s hard to draw conclusions based on first quarter numbers given seasonal effects, such as the industry’s usual push to finalize deals before the end of the year, resulting in lower first quarter origination activity,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Based on surveys from the Federal Reserve Board and discussions with lenders, there appears to be increasing capital available for commercial mortgages, but only limited demand for new mortgages from commercial and multifamily property investors.”

Among the key findings in the report are:

• New commercial and multifamily mortgages increased 12 percent from last year’s levels.
• On an absolute level, volumes remain low, with significant variations between investor groups.
• Originations for CMBS conduits and life insurance companies increased dramatically on a percentage basis – coming off of
   very low bases. 
• Originations for Fannie Mae and Freddie Mac, which had remained robust through the credit crisis, fell by almost half.
 
FIRST QUARTER 2010 12 PERCENT HIGHER THAN FIRST QUARTER 2009

The 12 percent overall increase in commercial/multifamily lending activity during the first quarter was driven by increases in originations for office and retail properties.  When compared to the first quarter of 2009, the increase included a 98 percent increase in loans for retail properties, a 29 percent increase in loans for office properties, a five percent decrease in loans for multifamily properties, a 28 percent decrease in loans for industrial properties, a 46 percent decrease in hotel property loans, and a 68 percent decrease in health care property loans.

Among investor types, loans for conduits for CMBS saw an increase of 657 percent compared to last year’s first quarter.  There was also a 131 percent increase in loans for life insurance companies, a four percent decrease in loans for commercial bank portfolios, and the dollar volume of loans for Government Sponsored Enterprises (or GSEs – Fannie Mae and Freddie Mac) saw a decrease of 49 percent.

FIRST QUARTER 2010 26 PERCENT LOWER THAN FOURTH QUARTER 2009

First quarter 2010 mortgage originations were 26 percent lower than originations in the fourth quarter 2009.  Among investor types, loans for conduits for CMBS saw an increase in loan volume of 430 percent compared to the fourth quarter 2009, loans for life insurance companies saw an increase in loan volume of one percent compared to the fourth quarter 2009, commercial bank portfolios decreased by 48 percent during the same time span, and originations for GSEs decreased 43 percent from the fourth quarter 2009 to the first quarter 2010. 
 
Compared to the fourth quarter of 2009, first quarter 2010 originations for office properties saw a 29 percent increase. There was an 11 percent decrease for retail properties, a 24 percent decrease for industrial properties, a 37 percent decrease for multifamily properties, a 73 percent decrease for hotel properties, and a 91 percent decrease for health care properties.
 
To view the report, please click here.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.