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Lending

3 ways loan originations took off in fourth quarter

Health care, retail rescued flatline multifamily originations

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Commercial and multifamily mortgage originations grew 34% from the third to the fourth quarter of 2013, and fourth quarter 2013 numbers were 16% higher compared to the fourth quarter of 2012, according to the Mortgage Bankers Association (MBA).

The MBA’s commercial/multifamily mortgage bankers’ originations index also shows originations for the full year 2013 were 15% higher than in 2012.

Multifamily originations were flat, while health care originations led the rally.

“Commercial and multifamily mortgage borrowing and lending ended 2013 on a particularly strong note,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “The fourth quarter marked the highest volume of mortgage originations since 2007, as all the major investor groups increased their activity. 

“Initial indications are that 2013’s volume was up 15% from 2012 – putting 2013 originations in the neighborhood of $280 billion in closed loans,” Woodwell said.

The fourth quarter’s 16% year-over-year increase in commercial/multifamily lending volumes was primarily driven by the increase in originations for health care, retail and office properties. 

Health care properties led the way, with a 70% jump in the dollar volume of loans. Retail saw a 43% increase, and office properties saw a 27% increase. 

Originations for hotel properties fell 9% while originations for industrial properties recorded a 30% decline when compared to the fourth quarter of 2012.

Also from the MBA report:

Among investor types, the dollar volume of loans originated for commercial bank portfolios increased by 54% from last year’s fourth quarter.  There was a 40% increase for life insurance companies, a 15% increase for CMBS and a 43% decrease in dollar volume of loans originated for Government Sponsored Enterprise (or GSE – Fannie Mae and Freddie Mac) loans.

Commercial and multifamily mortgage origination volumes during 2013 were 15% higher than originations during 2012.  Compared to 2012, originations for health care properties increased 35%.  There was a 22% increase for office properties, a 13% increase for multifamily properties, a 10% increase for hotel properties, a 4% increase for retail properties, and an 11% decrease for industrial properties.

Among investor types, 2013 versus 2012, loans for CMBS increased 33%, loans for commercial bank portfolios increased in 32%, originations for life insurance companies increased 25% and loans for GSEs decreased 18% 2013 versus 2012.

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