Commercial/multifamily originations topped $345 billion in 2005.

The total amount of commercial/multifamily closed loans originated during 2005 came to $345 billion, a 49.9 percent increase in volume over 2004, according to a report by the Mortgage Bankers Association (MBA).

MBA's 2005 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation noted that the multifamily segment owned the largest share of originations among property types, while the commercial mortgage-backed securities (CMBS) conduit category was the leading investor type.

In addition to the $345 billion of closed loans tracked by MBA, commercial/multifamily finance firms reported $378.6 billion in direct originations during 2005--loans on which firms worked directly with the borrower and either closed the loan in their name or worked with a lender to close the loan, noted the report.

Furthermore, firms intermediated $114.2 billion during the year, while the report captured $318.1 billion in originations for third parties--loans on which firms served as an intermediary or closed the loan with the intent of selling it to a third party, said MBA.

Meanwhile, commercial and multifamily loan originations during the first quarter of 2006 increased 34.2 percent compared with the same quarter last year.

The year-over-year increase during the first quarter was led by solid gains among all property types, while CMBS conduits and commercial banks led the increases among investor types. First-quarter loan originations were down 37.4 percent compared with the fourth quarter of 2005, according to MBA Chief Economist Doug Duncan.

"The first quarter is traditionally when originators recover from the flood of year-end activity and build the foundation for the year ahead," noted Duncan. "While it is unknown if the rate of growth seen in these markets during 2005 will continue at the same pace through 2006, first-quarter numbers indicate no immediate signs of slowing."

First-quarter 2006 mortgage bankers' originations were 37 percent lower than originations in the fourth quarter of 2005, reflecting the industry's usual push to finalize deals before the end of the year, and the traditional and subsequent drop-offs in first-quarter numbers. First-quarter numbers showed decreases in origination volumes across all property and investor types when compared with the fourth quarter of 2005, said MBA.

The increase in commercial/multifamily lending activity over the first quarter of 2005 included a 26 percent increase in loans for office buildings, a 23 percent increase in loans for multifamily properties, a 55 percent increase in loans for retail, a 33 percent increase in loans for industrial space and a 123 percent increase for health-care properties. The largest percentage increase in lending was for hotel properties, which saw a 165 percent increase from the first quarter of 2005, according to MBA.

Among investor types, commercial banks, life insurance companies and CMBS conduits drove much of the overall increase, although lending activity rose among almost all types.

Mortgage bankers' originations for CMBS conduits increased 35 percent from the first quarter of 2005, originations for commercial banks increased 64 percent and originations for life insurance companies increased 2 percent.

Originations for Fannie Mae and Freddie Mac increased 29 percent, originations for FHA increased 62 percent and originations for pension funds dropped by 86 percent from the fourth quarter of 2005.