Commercial and multifamily mortgage originations hit their highest levels since 2007 in the fourth quarter 2012, and are expected to increase up to $254 billion in 2013, according to research by the Mortgage Bankers Association released on Monday at its annual CREF/Multifamily Housing Convention & Expo in San Diego. In the fourth quarter 2012 originations were up 49 percent from the quarter previous. They were also up 49 percent from the same quarter in 2011. Overall, originations for the full year of 2012 increased 24 percent compared to 2011.
The Mortgage Observer is among the over 2,600 attendees gathered at the Manchester Grand Hyatt San Diego for the MBA’s convention–a number of attendees that has increased since last year.
After years coping with the financial crisis and credit crunch, this year the general attitude at the convention is to “look forward much more than to look backwards,” Jamie Woodwell, vice president in the Research and Economics group at the MBA, told The Mortgage Observer. Investors, lenders and originators gathered in San Diego are “looking for opportunity for the coming years,” Mr. Woodwell added.
The positive mood was confirmed by the data unveiled on Monday, with originations for hotel properties and CMBS driving the overall increase.
From the fourth quarter of 2011 to the fourth quarter of 2012, the dollar volume of loans was up 331 percent for hotel properties, up 78 percent for office properties, up 49 percent for multifamily properties, up 46 percent for industrial properties, up five percent for retail properties and down 26 percent for health care properties. Among investor types, over last year’s fourth quarter there was an increase by 228 of dollar volume for CMBS loans, by 68 percent for commercial bank portfolio loans, by 51 percent for government sponsored enterprises loans and by 18 percent for life insurance companies loans.
From the third quarter 2012 to the fourth quarter 2012, originations were up 99 percent for hotel properties, up 86 percent for industrial properties, up 57 percent for health care properties, up 48 percent for multifamily properties, up 44 percent for office properties and up 22 percent for retail properties. Among investor types–between the third and the fourth quarters of 2012–loans for conduits for CMBS increased by 141 percent, loans for government sponsored enterprises increased by 54 percent, loans for life insurance companies increased by 33 percent and loans for commercial bank portfolios increased by 32 percent.
Full year originations increased by 61 percent for hotel properties, by 36 percent for multifamily properties, by 19 percent for retail propertied, by 10 percent for industrial properties, by nine percent for office properties and by six percent for health care properties. From 2011 to 2012 loan originations for commercial bank portfolios increased by 51 percent, for CMBS by 45 percent and for government sponsored enterprises by 43 percent. Loans for life insurance companies were unchanged.
The MBA projects originations of commercial and multifamily mortgages will grow by 11 percent in 2013, up to $254 billion, and that these will continue to rise up to $289 billion in 2015.
“Low interest rates are prompting borrowers to finance, and improving markets are helping more deals underwrite successfully,” said Mr. Woodwell. “The relative strength of commercial and multifamily mortgages as investments continues to fuel lenders’ appetites.”