MBA Survey Shows Continued Slowdown of Commercial/Multifamily Mortgage Lending in First Quarter 2009
Commercial and multifamily mortgage loan originations continued to drop in the first quarter of 2009, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. First quarter originations were 70 percent lower than during the same period last year and 26 percent lower than during the fourth quarter of 2008. The year-over-year decrease was seen across all investor groups and most property types.
“In the first quarter of 2009 we saw the effects of the continued recession coupled with little demand from borrowers and a constrained supply from lenders as a result of the credit crunch,” said Jamie Woodwell, Vice President of Commercial Real Estate Research at the Mortgage Bankers Association. “The net result was low levels of new originations.”
Decreases in total commercial/multifamily mortgage originations continued to be led by a drop in commercial mortgage-backed security (CMBS) conduit loans.
First Quarter 2009 70 Percent Lower Than First Quarter 2008
The 70 percent overall decrease in commercial/multifamily lending activity during the first quarter was driven by decreases in originations for all property types. When compared to the first quarter of 2008, the decrease included an 88 percent decrease in loans for hotel properties, an 80 percent decrease in loans for health care properties, a 76 percent decrease in loans for retail properties, a 66 percent decrease in loans for office properties, a 61 percent decrease in multifamily property loans, and a 50 decrease in industrial property loans.
Among investor types, conduits for CMBS saw a decrease of 96 percent compared to last year’s first quarter. There was also an 80 percent decrease in loans for commercial bank portfolios, a 66 percent decrease in loans for life insurance companies, and the dollar volume of multifamily loans by Fannie Mae and Freddie Mac saw a decrease of 26 percent.
First Quarter 2009 26 Percent Lower Than Fourth Quarter 2008
First quarter 2009 mortgage originations were 26 percent lower than originations in the fourth quarter of 2008.
Among investor types, loans for conduits for CMBS saw a decrease in loan volume of 83 percent compared to the fourth quarter of 2008, loans for commercial bank portfolios saw a decrease in loan volume of 37 percent compared to the fourth quarter of 2008, GSEs’ volume decreased by 17 percent during the same time span, and life insurance companies decreased 7 percent from the fourth quarter 2008 to first quarter 2009.
Compared to the fourth quarter of 2008, first quarter originations for health care properties saw a 72 percent decrease. There was a 39 percent decrease for multifamily properties, a 9 percent decrease for retail properties, a 4 percent decrease for office properties, a 67 percent increase for industrial properties, and hotel properties remained relatively unchanged.
To view the report, please visit the following Web link: http://www.mortgagebankers.org/files/Research/CommercialOriginations/1Q09CMFOriginationsSurvey.pdf
About the author
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org