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Q2 2007 Commercial/Multifamily Loan Originations Remain Strong Overall

August 22, 2007

Washington, D.C. - Commercial and multifamily mortgage bankers' loan originations were once again strong in the second quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Up from the first quarter, second quarter originations were 40 percent higher than compared to the same period last year. The increase was seen across most property types and investor groups.

Increases in total commercial/multifamily mortgage originations were led by increases in commercial mortgage-backed securities (CMBS) conduit loans and loans financing hotel properties. The strong second quarter included heavy volume driven by real estate investment trust (REIT) privatizations and continues a trend of second-quarter-over-second-quarter increases going back to the beginning of MBA's survey in 2001.

"A number of large deals helped boost commercial/multifamily origination volumes in the second quarter," said Jamie Woodwell, MBA's Senior Director of Commercial/Multifamily research. "As a result, the quarter saw significant growth in CMBS and hotel loans. Overall, second quarter commercial/multifamily originations remained strong despite the initial phases of a general re-pricing of risk in the commercial/multifamily and other capital markets." 

Absent the spate of large hotel deals, overall originations would have increased approximately 27 percent and conduit originations by 42 percent between the second quarter of 2006 and the second quarter of 2007.

Second Quarter 2007 Forty Percent Higher Than Second Quarter 2006

The increase in commercial/multifamily lending activity during the second quarter was driven by increases in originations for most property types. When compared to the second quarter of 2006, the overall increase included a 330 percent increase in loans for hotel properties, a 34 percent increase in loans for retail properties, a 19 percent increase in loans for office properties, a 18 percent increase in loans for multifamily properties, as well as a 14 percent decrease in loans for health care properties and a 7 percent decrease in loans for industrial properties.

Among investor types, conduits for CMBS saw an increase compared to last year of 77 percent, a 14 percent increase for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac), as well as a 11 percent decrease for commercial bank portfolios, and a 15 percent decrease in loans for life insurance companies.

Second Quarter 2007 26 Percent Higher Than First Quarter 2007

Second quarter 2007 mortgage bankers originations were 26 percent higher than originations in the first quarter of 2007. Compared to the first quarter, numbers show increases in all property types except office and health care.

Detailed statistics on the size and scope of the commercial/multifamily origination market are available from these MBA commercial/multifamily research reports.

  • Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation, 2006
  • Commercial Real Estate/Multifamily Finance Firms: Annual Origination Volumes, 2006
  • MBA Annual Report on Multifamily Lending, 2006

These and other reports are available at or through Click here to view MBA's Q2 2007 Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

Source: MBA

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