Commercial Loan Originations Remain Strong in 2Q

Washington, DC, August 23, 2007--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.

Up from the first quarter, second-quarter originations were 40% 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 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 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% and conduit originations by 42% between the second quarter of 2006 and the second quarter of 2007.

The increase in lending 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% increase in loans for hotel properties, a 34%increase in loans for retail properties, a 19% increase in loans for office properties, an 18% increase in loans for multifamily properties, as well as a 14% decrease in loans for health care properties and a 7% decrease in loans for industrial properties.