Mortgage Bankers Association: Commercial/Multifamily Originations Down 65% in 2008

Commercial/multifamily mortgage origination volumes decreased 65% in 2008 as the number of loans intended for securities fell off sharply. Mortgage bankers closed $181.4 billion in commercial and multifamily loans, according to the Mortgage Bankers Association's 2008 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation. The MBA report showed that decreases were seen across all property types and most investor groups. The largest declines were in loans intended for commercial mortgage-backed securities, collateralized debt obligations and other asset-backed security conduits. Intermediated loan volume decreased 68% between 2007 and 2008. "After seeing considerable growth in 2006 and 2007, commercial mortgage originations fell dramatically in 2008," said Jamie Woodwell, MBA's vice president of commercial real estate research. "The continuing credit crunch, a relatively low volume of commercial mortgages maturing in the coming years and little incentive for property owners to sell their properties all continue to put downward pressure on origination volumes." Originations were dominated by multifamily loans, representing $64.6 billion, or 36% of the lending total. Among major investor groups, CMBS, CDO and other ABS conduits saw the greatest percentage decrease in volume between 2007 and 2008, followed by real estate investment trusts, special finance companies and life insurance companies. Lending for hotel/motel properties had the largest decrease in originations by property type, followed closely by office properties.