Q3 commercial/multifamily originations set record.


Commercial and multifamily mortgage bankers' loan originations set a new record during the third quarter of 2005, according to MBA.

MBA's quarterly survey of commercial/multifamily mortgage loan originations showed the $58.3 billion in loan originations reported for the third quarter was 64 percent higher than the third quarter of 2004 and 31.2 percent higher than the second quarter of 2005.

The quarter-to-quarter increase was led by substantial gains among multifamily and office property types, while commercial mortgage-backed securities (CMBS) conduits and life insurance companies led the way among investor types, according to Doug Duncan, MBA chief economist and senior vice president of research and business development.

"Capital continues to flow into the commercial and multifamily real estate markets on both the debt and equity sides," noted Duncan. "The 31.2 percent quarter-to-quarter increase in origination volume indicates that the rate of growth in this market is continuing at an impressive pace."

MBA also reported that year-to-date loan originations were 43.6 percent higher than they were at the same time the previous year.

The increase in third-quarter commercial/multifamily lending activity was across all property types. The $22.8 billion increase over the third quarter of 2004 included a 55 percent increase in loans for office buildings, a 45 percent increase in loans for multifamily properties, a 33 percent increase in loans for retail and an 80 percent increase in loans for industrial space.

The largest percentage increase in lending was for hotel properties, which saw a 531.6 percent increase from the third quarter of 2004. This hefty percentage increase in hotel properties was largely due to a surge of production volume over the previous two quarters, according to MBA.

Among investor types, commercial banks and CMBS conduits drove much of the overall increase, although lending activity increased among almost all types, said MBA. Mortgage bankers' originations for conduits increased 144 percent from the third quarter of 2004; originations for commercial banks increased by 33 percent, and originations for life insurance companies increased 22 percent.

Originations for Fannie Mac increased 7 percent, originations for Freddie Mae increased 18 percent, originations for Federal Housing Administration (FHA) loans increased 104 percent and originations for pension funds dropped by 11 percent.

Multifamily was again the dominant...

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