Multi-family Lending Increases but Lags other Commercial Activity

Commercial and multi-family mortgagernlending rose in the second quarter of 2012 due, the Mortgage BankersrnAssociation (MBA) said, to low interest rates and continued stabilization andrngrowth in the commercial real estate markets. rnThe volume of mortgage originations was up 39 percent from the firstrnquarter of this year and 25 percent compared to lending one year earlier.</p

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The MBA’s Quarterly Survey ofrnCommercial/Multifamily Mortgage Bankers Originations noted increased lendingrnfrom every major investor group it surveys. rnCommercial banks saw the largest annual increase at 58 percent while onrna quarterly basis the index rose from 158 to 172.  Lending on the part of the two governmentrnsponsored enterprises (GSEs) Fannie Mae and Freddie May increased from 157 torn201 quarter to quarter; this was 50 percent above the lending one year earlier.rn  Conduit (Commercial mortgage-backedrnsecurities) lending nearly quadrupled from the first to the second quarter (23rnto 94) but was up only 16 percent over the Q2 2011 figure.  The final investor group, life insurancerncompanies, increased from an index of 220 in Q1 to 302 in Q2 but was up only 10rnpercent on an annual basis.</p

The quarter-over-quarter growth was drivenrnby increases in lending for hotel and office properties, up 147 percent and 66rnpercent respectively.  Multifamily lendingrnhad the smallest quarterly increase, 21 percent.  There were also increases of 47 percent forrnindustrial properties, 33 percent for health care facilities, and 29 percentrnfor retail.  </p

Multifamily lending increased 19 percentrnyear-over-year while retail lending was up 56 percent, hotels properties 22rnpercent, office properties 15 percent and health care properties 11rnpercent.  Loans for industrial propertiesrnfell five percent.</p

The average size of a multi-family loanrnin the second quarter of 2012 was $12.2 million compared to $14.2 million thernprevious quarter and $14.3 million in the second quarter of 2011.  The average size of a loan from the GSEs wasrn$12.7 million compared to $14.2 million the previous quarter and $12.2 millionrnin Q2 2011.

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