MBA Report Shows Increased Lending Across All Property Types in 2013
Guelda Voien April 11, 2014, 9 a.m.
Commercial mortgage origination exceeded expectations in 2013, with $358 billion in loans on commercial and multifamily properties closed, according to the annual origination summation report from the Mortgage Bankers Association.
The report, unveiled earlier this week, showed banks invested $100.5 billion last year–28 percent of the annual volume–while CMBS, CDO and ABS issuers invested $79.8 million, which accounted for 22 percent of the overall volume amount. Life insurance companies and pension funds did $60.2 billion in deals—17 percent of the year’s total.
The MBA also last week released their origination ranking, which had Bank of America Merrill Lynch as the top commercial bank or savings institution by origination volume, and J.P. Morgan Chase as the biggest CMBS or conduit lender, with $13.7 billion originated. The most active life company, per that report, was MetLife and TIAA-CREF the most active pension fund.
Multifamily properties saw the highest volume, at $136.9 billion, followed by office properties for which $70.7 billion in loans closed, the data show.
“Multifamily continued to be the belle of the ball,” Jamie Woodwell, vice president of research and economics at the MBA, told Mortgage Observer. But generally, every property type saw an increase in lending, with an overall 22 percent year-over-year increase in lending. “There was a rising tide and it was really taking all property types with it,” he said.
Multifamily loans accounted for $136.9 billion in lending, up 33 percent from 2012. Other types were also up: office properties, for which loans totaled $70.7 billion, were up 50 percent year-over-year, and retail properties, which saw $52.2 billion lent, were up 21 percent since last year, Mr. Woodwell said. Meanwhile, $19.5 billion was lent on industrial properties, up 11 percent year-over-year, according to the report.
Loans closed for REITs, mortgage REITs and investment funds were the largest loans, the report found, averaging $78.4 million in 2013. The average loan for CMBS, CDO and ABS conduits was only $27.3 million.
Projections so far have CMBS and other securitized mortgage products topping $90 billion in 2014, and possibly reaching $120 billion, said Mr. Woodwell. But the year has started off unexpectedly slow.
“There are some constraints on originations. There are fewer loans that are coming due in 2014,” he said, although he said some loans not due till next year or 2016 are being pulled forward.