Commercial, Apartment Lending Falls Sharply

Lenders scaled back new apartment and commercial real estate lending during the fourth quarter of last year, according to the Mortgage Bankers Association. Commercial/multifamily originations were 80% lower than during the fourth quarter of 2007, and the decline was seen across all property types and investor groups (with CMBS conduits seeing origination activity fall the most, 98% compared with the year-earlier quarter). Jamie Woodwell, the MBA's vice president of commercial real estate research, said commercial and multifamily lending for all of 2008 was 60% lower than in 2007. "Between the worsening economy and the continued credit crunch, lenders are extremely cautious about lending and borrowers are likely to hold onto the assets and the loans they already have."