Commercial and multifamily mortgage originations grew 107% in the second quarter compared to the year-ago period as financials on all property types experienced greater stability and demand, according to the Mortgage Bankers Association
Between the first and second quarters, originations jumped about 52%, with demand for loans backed by health care, hotel, retail, multifamily, office and industrial properties growing significantly over the year-ago quarter.
The MBA's Quarterly Survey of Commercial/Multifamily Originations showed lending rising from the "depths of 2009 and 2010," according to Jamie Woodwell, vice president of MBA's Commercial Real Estate Research.
"Greater stability in property fundamentals and prices, and an improving sales market, are providing greater clarity for borrowers and lenders alike," Woodwell said. "Property values and interest rates — coupled with job growth, consumer spending, household growth and other macro-economic trends that drive demand for commercial real estate — will be keys to how property owners seek and qualify for mortgage financing going forward."
Loans for health care properties experienced the greatest surge in originations, growing 141% from last year. Hotel, retail and multifamily properties also saw originations rise more than 100% over the second quarter of 2010. Loans on office and industrial properties experienced the least amount of demand, but originations on those loans still grew 54% and 34%, respectively, when compared to year-ago levels.
On the investor's side of the market, loans for conduits on CMBS experienced a 638% jump in originations over 2010, followed by commercial bank portfolios (a 150% increase), life insurance companies (an 87% increase) and loans for Fannie Mae
and Freddie Mac
(a 34% increase).
The rise in 2Q commercial originations is in line with analysts' projections. A few months ago, Barclays Capital
analysts said deals delivered through the new CMBS market, known as CMBS 2.0, could run as high as $35 billion by the end of 2011.
The CMBS 2.0 market refers to all commercial deals crafted after the financial markets started slowly coming back from the 2008 financial meltdown, which all but killed activity in the commercial origination segment for a few years.
Write to Kerri Panchuk