GeneG posted on June 12, 2009 15:55
Commercial/multifamily mortgage origination volumes decreased 65% in 2008, with mortgage bankers closing $181.4 billion in commercial and multifamily loans; according to the Mortgage Bankers Association.
Decreases were seen across all property types and most investor groups, and were led by decreases in loans intended for commercial mortgage-backed security (CMBS), collateralized debt obligations (CDO) and other asset-backed security (ABS) conduits. Intermediated loan volume decreased 68%.
"After seeing considerable growth in 2006 and 2007, commercial mortgage originations fell dramatically in 2008," said Jamie Woodwell, MBA's vice president of commercial real estate research. "The continuing credit crunch, a relatively low volume of commercial mortgages maturing in the coming years and little incentive for property owners to sell their properties all continue to put downward pressure on origination volumes."
Lending for hotel/motel properties had the largest decrease in originations by property type, followed closely by office properties.
The average loan size was greatest for office properties: $26.7 million per loan. The average loan size for multifamily buildings was $13 million, $12.7 million for health care facilities, $6.5 million for retail, $5.4 million for hotel / motel properties and $5 million for industrial properties. Other property types averaged $16.8 million per loan.
Commercial banks and thrifts were the most active investor group in 2008 with $64.4 billion in activity (36% of the total). The second most active investor group was life insurance companies which accounted for $28.3 billion in closed loans (16%). Fannie Mae tallied $22.4 billion in closed loans (12%) followed by Freddie Mac at $17.7 billion (10%) and credit companies at $11 billion (6%).
by Mark Heschmeyer/COSTAR Group