MBA: Q2 commercial/multifamily originations up from Q1, down from last year.
Second-quarter 2009 commercial and multifamily mortgage loan originations fell 54 percent compared with the same period last year, the Mortgage Bankers Association (MBA) reported in its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, released Aug. 6.
Year-over-year decreases occurred across most investor groups and all property types. However, second-quarter originations were 50 percent higher than during the first quarter, attributable to historic seasonal trends. MBA noted that "very little" commercial/multifamily activity took place during the first quarter.
"Commercial and multifamily mortgage originations continue to feel the effects of the recession and the credit crunch, with volumes 54 percent below last year's second quarter and 83 percent below the peak seen in the second quarter of 2007," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "A 50 percent increase in volumes between the first and second quarter of this year follows a traditional seasonal increase in the second quarter. It also likely signals that commercial and multifamily mortgage originations bottomed in the first quarter of 2009."
Decreases in originations for all property types drove the 54 percent overall decrease in commercial/multifamily lending activity during the second quarter. Compared with the second quarter of 2008, data included an 81 percent decrease in loans for office properties, a 77 percent decrease in loans for hotel properties, a 70 percent decrease in loans for health-care properties, a 65 percent decrease in loans for industrial properties, a 51 percent decrease in retail property loans and a 21 percent decrease in multifamily property loans. Among investor types, commercial bank portfolios saw an 83 percent decrease compared with last year's second quarter. Additionally, MBA reported a 57 percent decrease in loans for conduits for commercial mortgage-backed securities (CMBS) and a 54 percent decrease in loans for life insurance companies. Dollar volume of loans for government-sponsored enterprises (GSEs) (Fannie Mae and Freddie Mac) saw a slight increase of 2 percent.
Second-quarter mortgage originations rose by 50 percent over the first quarter. Because of the low base of originations in the first quarter, the percentage increases seen in the second quarter are "quite dramatic," Woodwell noted.
Among investor types, loans for conduits for CMBS increased in loan volume by 471 percent compared with the first quarter, loans for life insurance companies increased by 46 percent, GSE volume increased by 39 percent and originations for commercial bank portfolios increased by 6 percent.
Compared with the first quarter, second-quarter originations for health-care properties saw a 173 percent increase. Hotel properties increased by 129 percent, retail properties grew by 93 percent, multifamily properties rose by 73 percent, office properties decreased by 28 percent and industrial properties decreased by 46 percent.
To view the report, visit www.mortgagebankers.org/files/research/commercialoriginations/2q09cmforiginationssurvey.pdf.