The Mortgage Bankers Association (MBA) reports that commercial and multifamily loan originations were down 7 percent in the fourth quarter of 2011 compared to the third quarter but were 13 percent higher than originations in the fourth quarter a year earlier.  The year-over year change was driven by originations for both industrial and multifamily properties which increased 43 percent and 31 percent respectively from Q4 2010.  On the negative side, retail loans were down 8 percent, loans for healthcare properties fell 24 percent, office properties were down 29 percent and hotel originations decreased 44 percent.

Quarter over quarter results were mixed.  There was a 153 percent jump in originations for health care properties; industrial loans were up 51 percent and multifamily properties increased 29 percent.  Originations for healthcare properties fell 52 percent, office properties were down 39 percent, and retail property loans decreased 24 percent.

Looking at lending by investor groups, commercial bank portfolios were up by 122 percent compared to the fourth quarter of 2010 and Freddie Mac and Fannie Mae (the GSEs) increased lending 17 percent.  Life insurance companies and conduits for commercial mortgage backed securities (CMBS) decreased lending by 23 percent and 50 percent respectively.

 On a quarter-over-quarter basis only the GSEs increased their loans, which rose 34 percent to an all time high.  Conduits for CMBS were down 26 percent, life insurance companies decreased lending by 23 percent, and commercial bank portfolios declined by 16 percent.  

"MBA's Commercial/Multifamily Mortgage Bankers Origination Index hit record levels for life insurance companies in the second and third quarters of 2011," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "In the fourth quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new all-time high. While the CMBS market continued to be held back by broader capital markets uncertainty during the past year, others - like the GSEs, life companies and many bank portfolios - increased their appetite for commercial and multifamily loans."

Commercial/Multi-family Originations by Investor Types

*2001 Ave. Quarter = 100

Commercial/Multi-family Originations by Property Types

*2001 Ave. Quarter = 100