MBA: Life Companies Lead Growth in Commercial Volume

The Mortgage Bankers Association’s commercial and multifamily loan origination index for 2Q13 is 167, up 36% from 1Q13’s 123 and 7% from 2Q12’s 157. Life companies are leading the way, setting a quarterly record in terms of lending.

Among investor types, the dollar volume of loans originated for life insurance companies increased by 16% from last year’s second quarter. There was a 13% increase for loans originated for commercial bank portfolios and an 8% increase for Fannie Mae and Freddie Mac loans. However, the more rate-sensitive conduit originations suffered a 14% decrease in dollar volume.

Jamie Woodwell, MBA’s vice president of commercial real estate research, commented, “After a slow start to the year, lending by life insurance companies surged in the second quarter to record the highest quarterly volume on record for that sector.”

The life company component of the index is at 349, compared with 175 in 1Q13 and 302 for 2Q12.

At the other end of the spectrum, the conduit index component is 80, which is an improvement from 1Q13’s 63, but down from 94 in 2Q12. However, the 2Q13 figure represents the third highest volume for conduits since that channel dried up in the bust.

The MBA found the index value for commercial bank originations to be 196, which while better than 1Q’s 171 and 2Q12’s 172, is well down from the 240 for 4Q12. Multifamily lenders Fannie Mae and Freddie Mac have an index of 217, well off the 4Q12 peak of 355.

Woodwell said, “The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31% ahead of last year’s first half total.” But the index of 224 is down from 4Q12’s 270.

The highest index by property type for 2Q13 is hotels 280, retail 218, industrial 157, office 96 and health care 93.