MBA: Commercial and multifamily lending rises 36% in 2010

Commercial and multifamily lending rose 36% in 2010 compared to 2009, with mortgage bankers originating $110 billion in commercial and multifamily mortgages last year, the Mortgage Bankers Association said. Commercial and multifamily lending activity rose 88% between the fourth quarter of 2010 and 4Q 2009, with most of the increase  driven by loan originations for hotel and office properties, the MBA said in its preliminary “Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.” The increase included a 170% year-over-year jump in loans for office properties, a 169% increase in loans for hotels, a 98% rise in loans for industrial properties, a 94% hike in loans for retail locations, an 81% rise in multifamily property loans and a 4% increase in health care property loans. Among investors, the MBA says loan activity for conduits handling commercial mortgage-backed securities increased 60-fold when comparing  4Q of 2010 to the same period of 2009. Life insurance companies also were a leading source of lending in 2010 with insurance firm origination volumes growing 155% over 2009 levels. On the government-sponsored enterprise side of the mortgage market, Fannie Mae, Freddie Mac and Federal Housing Administration/Ginnie Mae reported strong fourth-quarter volumes, driven by increases in production for FHA/Ginnie Mae. Those increases offset a decline in production for Fannie Mae and Freddie Mac, the MBA said. Overall, the MBA says originations for commercial banks “saw a year-over-year decline, while originations for CMBS conduits increased more than 10-fold.” While commercial debt maturities has been a topic of concern for the past two years, the MBA said only 11%, or $155 billion, of the $1.4 trillion in outstanding commercial/multifamily mortgages held by nonbank investors will mature in 2011. Another 9%, or $125 billion, will mature next year. “The long-term nature of commercial real estate means that relatively fewer — not more — commercial and multifamily mortgages have been maturing during the throes of the credit crunch and recession compared to other credit types,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “For most investor groups, commercial mortgage maturities are relatively spread out, with some increases starting in 2015 as the loans originated in 2005, 2006 and 2007 come due,” Woodwell added. Write to Kerri Panchuk.

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