Commercial Mortgage Lending Falls in Q1

Washington, DC, May 14, 2009--Commercial and multifamily mortgage loan originations continued to drop in the first quarter of 2009, according to the Mortgage Bankers Association’s quarterly survey.

First quarter originations were 70 percent lower than during the same period last year and 26 percent lower than during the fourth quarter of 2008.  The year-over-year decrease was seen across all investor groups and most property types.

“In the first quarter of 2009 we saw the effects of the continued recession coupled with little demand from borrowers and a constrained supply from lenders as a result of the credit crunch,” said Jamie Woodwell, Vice President of Commercial Real Estate Research at the Mortgage Bankers Association.

“The net result was low levels of new originations.”

Decreases in total commercial/multifamily mortgage originations continued to be led by a drop in commercial mortgage-backed security conduit loans.

The 70 percent overall decrease was driven by decreases in originations for all property types.  It includes an 88 percent decrease in loans for hotel properties, an 80 percent decrease in loans for health care properties, a 76 percent decrease in loans for retail properties, a 66 percent decrease in loans for office properties, a 61 percent decrease in multifamily property loans, and a 50 decrease in industrial property loans.

Compared to the fourth quarter of 2008, first quarter originations for health care properties saw a 72 percent decrease. There was a 39 percent decrease for multifamily properties, a 9 percent decrease for retail properties, a 4 percent decrease for office properties, a 67 percent increase for industrial properties, and hotel properties remained relatively unchanged.