Commercial Real Estate Origination Increases in Q409: MBA
Mortgage originations for commercial real estate (CRE) and multifamily properties ended last year on an upswing, according to the latest data released by the Mortgage Bankers Association (MBA), as the investor landscape shifted with the market. In Q409, CRE and multifamily mortgage originations were up 12% from Q408 and up 15% from Q309, MBA said in its “Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations” (download here). The MBA said the year-over-year increase was a function of originations for all property types — except multifamily — increasing after constrained lending in the second half of 2008. Compared to Q408, hotel purchase loans were up 105%, retail increased 101%, industrial properties increased 59%, office properties were up 4%, health care properties were up 1% and multifamily decreased 8%. “Commercial and multifamily mortgage originations picked up in the fourth quarter, but remain at a low level in absolute terms,” said MBA vice president of commercial real estate research Jamie Woodwell. Investors that took out these loans shifted. Life insurance companies had the biggest year-over-year increase among investor types, up 112% from Q408. Commercial bank portfolios increased 17%, while loans for conduits for commercial mortgage-backed securities (CMBS) plummeted 82% and the dollar volume of loans for government-sponsored enterprises (GSE) was down 26%. "Inability to hedge loans while aggregating a pool large enough for securitization is one of the biggest obstacles preventing restarting of conduit lending for commercial real estate properties,” said Malay Bansal, head of portfolio management and advisory for commercial real estate and CMBS at NewOak Capital, an asset management, advisory, and capital markets firm in Manhattan. Compared to Q309, originations for health care properties increased 58% in Q409. Retail properties increased 34%, hotels were up 30%, industrial increased 19%, office properties were up 12% and multifamily was up 4%. Also compared to Q309, the loan volume for commercial bank portfolios increased 39% in Q409 and loans for life insurance companies increased 35%, while conduits for CMBS decreased 50% and originations for GSEs also decreased 15%. “The trend shows stability coming back to the market, but the pick-up in volumes really indicates just how low origination levels had fallen,” Woodwell said. Write to Austin Kilgore.