Commercial and multifamily mortgage originations in 2Q12 were up 25% on a year-over-year basis, benefiting from the same low interest rate environment that is sustaining residential mortgage lending, according to the Mortgage Bankers Association.
When compared with the first quarter, lending activity is up 39%. The origination volume index is at 157 for the second quarter, compared with 113 for the first quarter and 126 for 2Q11.
Jamie Woodwell, MBA’s vice president of commercial real estate research, commented, “Low interest rates and continued stabilization and growth in the commercial real estate markets are helping support new loan originations, and every major investor group increased their lending over the quarter.”
The increase over 2Q11 is driven by a 56% increase in the dollar volume of loans for retail properties and a 22% increase for hotel properties. There is a 19% increase for multifamily properties, a 15% increase for office properties and an 11% increase in health care property loans. These gains offset a 5% decrease in industrial property loans.
By lender type, life companies continue to lead the way, with an origination volume index of 302, followed by Fannie Mae and Freddie Mac at 201, commercial banks at 172 and conduits at 94. This represents the best quarter for commercial mortgage-backed securities originations since the fourth quarter of 2007.
It remains to be seen whether this is a sustainable trend or not. In 2Q11, the conduits had an index value of 80; for the following three quarters it was 42, 31 and 23.
