Loan originations on income producing properties will rise 17% this year to nearly $230 billion, the Mortgage Bankers Association is projecting in its first-ever non-residential lending forecast.
MBA economists also are expecting the volume of commercial and multi-family lending to increase steadily over the following three years to $290 billion, they said at the group's annual commercial real estate/multifamily housing conference in Atlanta.
And in another positive report, the association said concerns expressed by some that the volume of mortgages coming due in 2012 and 2013 would swamp the market are proving to be unfounded.
Only 10%, or $150.6 billion, of all commercial and multi-family mortgages held by non-bank lenders and investors will mature this year, according to the MBA's estimates. Not only is 10% considered to be normal, the group said, it is a 3% decline from $154.7 billion in 2011 and an 18% decline from $184 billion in 2010.
Jamie Woodwell, vice president of commercial real estate research, said lending activity this year will vary among the various investor groups, with lending by insurance companies and Fannie Mae/Freddie Mac continuing to lead the pack.
“Our forecast anticipates continued strength in lending by life companies and the GSEs and increased lending by banks and other lenders,” Woodwell said.
Even the CMBS sector is expected to pick up some steam this year and into the middle of the decade.
Woodwell called it a “slow but steady return.” But as Jay Brinkmann, MBA's chief economist, pointed out, the increase from $7 billion last year to $30 billion this year isn't such big deal “when compared to where we were in 2007,” when the CMBS volume was $225 billion.
“When you start out at zero, which is what the CMBS market was in 2009, any increase looks huge,” Brinkmann said.
