Pleasanton Weekly

Real Estate - November 11, 2011

Commercial/multi-family mortgage loans up 98%

Mortgages caught up in economic uncertainty of recent months decline, but still higher than year ago

by Jeb Bing

Third quarter 2011 commercial and multi-family mortgage loan originations were 98% higher than during the same period last year and 10% higher than the second quarter of 2011, according to a survey by the Mortgage Bankers Association.

"Lending on commercial and multi-family properties continues," said Jamie Woodwell, MBA's vice president of Commercial Real Estate Research.

"Mortgage originations by life company portfolios hit another new record in the third quarter, and lending by bank portfolios and Fannie Mae and Freddie Mac also picked up. Mortgages, which were caught up in the global economic uncertainty of recent months, declined from last quarter but were higher than last year's Q3 level."

The 98% overall increase in commercial/multi-family lending activity during the third quarter of 2011 was driven by increases in originations in most property types, the MBA survey showed. When compared to the third quarter of 2010, the increase included a 406% increase in loans for hotel properties, a 164% increase in loans for retail properties, a 103% increase in loans for office properties, a 39% increase in loans for multi-family properties, a 3% decrease in industrial property loans and an 8% decrease in health care property loans.

Among investor types, loans for commercial bank portfolios increased by 433% compared to last year's third quarter. There was also a 61% increase in loans for life insurance companies and a 47% increase in loans for Government Sponsored Enterprises, or Fannie Mae and Freddie Mac.

Third quarter 2011 commercial and multi-family mortgage originations were 10% higher than originations in the second quarter of 2011. Compared to the second quarter, third quarter originations for retail properties saw a 37% increase. There was an 8% increase for office properties, a 4% increase for hotel properties, a 2% decrease for multi-family properties, a 14% decrease for industrial properties and a 30% decrease for health care properties.

Among investor types, between the second and third quarters of 2011, loans for commercial bank portfolios saw an increase in loan volume of 55%, the survey showed.

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