ATLANTA—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 nonresidential lending forecast.
MBA economists also are expecting the volume of commercial and multifamily lending to increase steadily over the following three years to $290 billion, they said at the group's annual Commercial Real Estate Finance/Multifamily Housing Convention here last week.
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 multifamily mortgages held by nonbank 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 and 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.
The MBA's loan origination projections are the first-ever nonresidential lending volumes forecast by the association, which represents some 2,200-member companies that employ more than 280,000 people in all facets of real estate finance.
A more detailed report will be issued to members in the coming weeks, Woodwell said. But in the forecast released at the Atlanta conference, the MBA said a “relatively robust supply of capital” will be chasing deals in 2012.
The forecast breaks down lending activity by investor groups but not by property type.
The MBA also said income-property originations were up 13% in the fourth quarter of 2011 compared to the same period a year earlier, and that commercial/multifamily lending was up 64% last year compared to 2010. A more detailed analysis of activity last year will be released in April.
Meanwhile, the group's survey of loan maturity volumes, which covers $1.46 trillion worth of loans on income properties held or insured by life companies, Fannie Mae and Freddie Mac, the Federal Housing Administration, CMBS trusts and other nonbank lenders, found that maturities vary significantly by investor group.
