MBA: Second quarter 2010 originations increase

Second quarter commercial and multifamily mortgage originations were flat from last year's levels, and increased 35% from first quarter volumes, according to the Mortgage Bankers Association.

WASHINGTON, D.C. - Second quarter 2010 commercial and multifamily mortgage loan originations were 1% higher than during the same period last year and 35% higher than during the first quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

"Borrowing remains light as few commercial property owners are selling or refinancing their properties unless they have to," said Jamie Woodwell, MBA's vice president of Commercial Real Estate Research.

"Life insurers, CMBS conduits and others are back in the market and lending, and rates are at extremely attractive levels. However, low volumes of property sales, depressed property values, stressed cash flows and modest loan maturities are all keeping borrowing to a minimum."

Among the key findings in the report are:

- Second quarter commercial and multifamily mortgage originations were flat from last year's levels, and increased 35% from first quarter volumes.

- Originations for life insurance companies and CMBS conduits increased dramatically on a percentage basis.

- Originations for Fannie Mae and Freddie Mac fell by more than half from 2009 levels.

- On an absolute level, volumes remain low.

The 1% overall increase in commercial/multifamily lending activity during the second quarter was driven by increases in originations for office and industrial properties. When compared to the second quarter of 2009, the increase included a 183% increase in loans for industrial properties, a 180% increase in loans for office properties, an 18% increase in loans for hotel properties, a 76% decrease in loans for health care properties, a 25% decrease in multifamily property loans, and a 9% decrease in retail property loans.

Among investor types, loans for conduits for CMBS saw an increase of 173% compared to last year's second quarter. There was also a 148% increase in loans for life insurance companies, a 12% decrease in loans for commercial bank portfolios, and the dollar volume of loans for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac) saw a decrease of 55%.

Second quarter 2010 mortgage originations were 35% higher than originations in the first quarter of 2010. Among investor types, loans for conduits for CMBS saw an increase in loan volume of 106% compared to the first quarter, loans for life insurance companies saw an increase in loan volume of 57% compared to the first quarter, originations for GSEs increased 21% from the first quarter to the second quarter of 2010, and loans for commercial bank portfolios decreased by 2% during the same time span.

Compared to the first quarter, second quarter originations for hotel properties saw a 405% increase. There was a 114% increase for industrial properties, a 107% increase for health care properties, a 56% increase for office properties, a 38% increase for multifamily properties, and an 11% decrease for retail properties.