Industrial and Multi-family Loans Drive Annual CRE Increase

The Mortgage Bankers Associationrn(MBA) reports that commercial and multifamily loan originations were down 7rnpercent in the fourth quarter of 2011 compared to the third quarter but were 13rnpercent higher than originations in the fourth quarter a year earlier.  The year-over year change was driven byrnoriginations for both industrial and multifamily properties which increased 43rnpercent and 31 percent respectively from Q4 2010.  On the negative side, retail loans were downrn8 percent, loans for healthcare properties fell 24 percent, office propertiesrnwere down 29 percent and hotel originations decreased 44 percent.</p

Quarter over quarter results werernmixed.  There was a 153 percent jump inrnoriginations for health care properties; industrial loans were up 51 percentrnand multifamily properties increased 29 percent.  Originations for healthcare properties fell 52rnpercent, office properties were down 39 percent, and retail property loansrndecreased 24 percent.</p

Looking at lending by investor groups,rncommercial bank portfolios were up by 122 percent compared to the fourthrnquarter of 2010 and Freddie Mac and Fannie Mae (the GSEs) increased lending 17rnpercent.  Life insurance companies andrnconduits for commercial mortgage backed securities (CMBS) decreased lending byrn23 percent and 50 percent respectively. </p

 On a quarter-over-quarter basis only the GSEsrnincreased their loans, which rose 34 percent to an all time high.  Conduits for CMBS were down 26 percent, liferninsurance companies decreased lending by 23 percent, and commercial bankrnportfolios declined by 16 percent.  </p

“MBA’s Commercial/MultifamilyrnMortgage Bankers Origination Index hit record levels for life insurancerncompanies in the second and third quarters of 2011,” said Jamie Woodwell,rnMBA’s Vice President of Commercial Real Estate Research. “In the fourthrnquarter, multifamily originations for Fannie Mae and Freddie Mac hit a newrnall-time high. While the CMBS market continued to be held back by broaderrncapital markets uncertainty during the past year, others – like the GSEs, liferncompanies and many bank portfolios – increased their appetite for commercialrnand multifamily loans.”</p

Commercial/Multi-familyrnOriginations by Investor Types</p<table border="1" cellpadding="1" cellspacing="0"<tbody<tr<td rowspan="2" valign="top" width="187"

Investorrn Type</p</td<td colspan="2" valign="top" width="180"

Origination Volume Index*</p</td<td rowspan="2" valign="top" width="58"

% Chg</p

Q4-Q4</p</td<td colspan="2" valign="top" width="213"

Average Loan Size ($millions)</p</td</tr<tr<td valign="top" width="90"

Q3 2011</p</td<td valign="top" width="90"

Q4 2011</p</td<td valign="top" width="106"

Q3 2011</p</td<td valign="top" width="106"

Q4 2011</p</td</tr<tr<td valign="top" width="187"

Conduits</p</td<td valign="top" width="90"

42</p</td<td valign="top" width="90"

31</p</td<td valign="top" width="58"

-50</p</td<td valign="top" width="106"

30.5</p</td<td valign="top" width="106"

23.9</p</td</tr<tr<td valign="top" width="187"

Commercialrn Banks</p</td<td valign="top" width="90"

169</p</td<td valign="top" width="90"

143</p</td<td valign="top" width="58"

122</p</td<td valign="top" width="106"

11.8</p</td<td valign="top" width="106"

7.8</p</td</tr<tr<td valign="top" width="187"

Lifern Insurance </p</td<td valign="top" width="90"

282</p</td<td valign="top" width="90"

216</p</td<td valign="top" width="58"

-13</p</td<td valign="top" width="106"

20.5</p</td<td valign="top" width="106"

14.0</p</td</tr<tr<td valign="top" width="187"

GSEs</p</td<td valign="top" width="90"

176</p</td<td valign="top" width="90"

236</p</td<td valign="top" width="58"

17</p</td<td valign="top" width="106"

13.8</p</td<td valign="top" width="106"

14.3</p</td</tr<tr<td valign="top" width="187"

Total</p</td<td valign="top" width="90"

138</p</td<td valign="top" width="90"

129</p</td<td valign="top" width="58"

13</p</td<td valign="top" width="106"

14,9</p</td<td valign="top" width="106"

11.6</p</td</tr</tbody</table

*2001 Ave. Quarter = 100</p

Commercial/Multi-familyrnOriginations by Property Types</p<table border="1" cellpadding="1" cellspacing="0"<tbody<tr<td rowspan="2" valign="top" width="187"

Investorrn Type</p</td<td colspan="2" valign="top" width="180"

Origination Volume Index*</p</td<td rowspan="2" valign="top" width="58"

% Chg</p

Q4-Q4</p</td<td colspan="2" valign="top" width="213"

Average Loan Size ($millions)</p</td</tr<tr<td valign="top" width="90"

Q3 2011</p</td<td valign="top" width="90"

Q4 2011</p</td<td valign="top" width="106"

Q3 2011</p</td<td valign="top" width="106"

Q4 2011</p</td</tr<tr<td valign="top" width="187"

Multi-family</p</td<td valign="top" width="90"

140</p</td<td valign="top" width="90"

181</p</td<td valign="top" width="58"

31</p</td<td valign="top" width="106"

13.2</p</td<td valign="top" width="106"

13.5</p</td</tr<tr<td valign="top" width="187"

Office</p</td<td valign="top" width="90"

91</p</td<td valign="top" width="90"

56</p</td<td valign="top" width="58"

-29</p</td<td valign="top" width="106"

19.1</p</td<td valign="top" width="106"

11.7</p</td</tr<tr<td valign="top" width="187"

Retailrn </p</td<td valign="top" width="90"

222</p</td<td valign="top" width="90"

169</p</td<td valign="top" width="58"

-8</p</td<td valign="top" width="106"

20.9</p</td<td valign="top" width="106"

12.3</p</td</tr<tr<td valign="top" width="187"

Industrial</p</td<td valign="top" width="90"

142</p</td<td valign="top" width="90"

214</p</td<td valign="top" width="58"

43</p</td<td valign="top" width="106"

12.4</p</td<td valign="top" width="106"

16.2</p</td</tr<tr<td valign="top" width="187"

Hotel</p</td<td valign="top" width="90"

231</p</td<td valign="top" width="90"

110</p</td<td valign="top" width="58"

-44</p</td<td valign="top" width="106"

39.0</p</td<td valign="top" width="106"

20.1</p</td</tr<tr<td valign="top" width="187"

Healthrn Care</p</td<td valign="top" width="90"

91</p</td<td valign="top" width="90"

229</p</td<td valign="top" width="58"

-24</p</td<td valign="top" width="106"

7.2</p</td<td valign="top" width="106"

12.4</p</td</tr</tbody</table

*2001 Ave. Quarter = 100

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.