Driven by large increases in multifamily and industrial production, commercial loan originations rose 13% year-over-year in the fourth quarter of 2011, according to the Mortgage Bankers Association.
At the same time, though, originations for the quarter were off 7% from the previous three-month period.
A 31% jump in multifamily loan production in the fourth quarter was not unexpected, given the rush to build apartments. But a 43% increase in loans for industrial properties was something of a surprise.
Loan production was also up 8% for retail properties. But originations were down 24% for health care developments, off 29% in office property mortgages and down 44% in hotel properties.
The MBA's Commercial/Multifamily Mortgage Bankers Origination Index hit record levels for life insurance companies in the second and third quarters of 2011. But in the fourth quarter, multifamily originations by Fannie Mae and Freddie Mac set a new all-time high.
“While the CMBS market continued to be held back by broader capital markets uncertainty during the past year, others - like the GSEs, life companies and many bank portfolios - increased their appetite for commercial and multifamily loans," Jamie Woodwell, MBA's vice president of commercial real estate research said in Atlanta, where the group is holding its annual commercial-multi-family lending conference.
"In the fourth quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new all-time high,” he added. “While the CMBS market continued to be held back by broader capital markets uncertainty during the past year, others - like the GSEs, life companies and many bank portfolios - increased their appetite for commercial and multifamily loans."
Among investor types, loans for commercial bank portfolios increased by 122% compared to last year's fourth quarter. There was also a 17% increase in loans for the GSEs. But originations by life companies were off 13% while activity by conduits for CMBS's dropped 50%.
The MBA said it will release a more detailed analysis of 2011 commercial/multifamily origination trends, based on its annual origination survey, in April.
