Multifamily originations are on the rise

Posted on July 30, 2013

Commercial and multifamily mortgage origination volumes during the second quarter of 2013 rose 36% from the first quarter of 2013 and jumped 7% year-over-year, the Mortgage Bankers Association said.

“Commercial and multifamily mortgage lending and borrowing continued to grow during the second quarter,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell.

“The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31% ahead of last year’s first half total. And after a slow start to the year, lending by life insurance companies surged in the second quarter to record the highest quarterly volume on record for that sector,” added Woodwell.

When compared to the second quarter of 2013, the 7% overall increase in commercial lending volume was driven by an increase in originations for multifamily properties. The dollar volume of loans for multifamily properties rose 31%, while hotel properties were up only 3%. The dollar volume of loans for retail properties dropped 14%, while health care properties fell 36%. Office and industrial properties remained unchanged year-over-year.

From last year’s second quarter, the dollar volume of loans originated for life insurance companies rose 16% among investor types. Bank portfolio loans also increased 13%, while government sponsored enterprise loans — Fannie Mae and Freddie Mac loans — grew 8%. There was a 14% drop in dollar volume of loans originated for conduits tied to CMBS.

While commercial and multifamily mortgage originations overall rose 36% from the first quarter, originations for just hotel properties shot up 89%. Office property originations reported a 75% increase, retail properties grew by 48%. In addition, industrial properties and multifamily properties rose 44% and 22%, respectively, from the first to second quarter.

Health care originations remained unchanged.

Between the first and second quarter of 2013, loans for life insurance companies reported an increase in dollar volume of 100% among investor types. Loans for conduits for CMBS saw an increase in loan volume of 27%, originations for commercial bank portfolios rose 14% and loans for GSEs grew 2%.