Source: Mortgage Orb | Date Published : February 8, 2012
The Mortgage Bankers Association (MBA) is projecting originations of commercial and multifamily mortgages will hit $230 billion this year, an increase of 17% from 2011 volumes, and continue to rise to $290 billion in 2015.
However, the MBA is also projecting that commercial and multifamily mortgage debt outstanding will also grow this year, reaching more than $2.4 trillion by the end of December - 2% higher than at the end of 2011. By the end of 2015, mortgage debt outstanding is forecast to exceed $2.5 trillion.
"Our forecast anticipates continued strength in lending by life companies and the [government-sponsored enterprises], increased lending by banks and others, and a slow but steady return in [commercial mortgage-backed securities] (CMBS) activity," says Jamie Woodwell, the MBA's vice president of commercial real estate research. "Low loan maturity volumes over the next few years, coupled with moderate sales transaction activity, will mean that a relatively robust supply of mortgage capital will be a catalyst for deal activity."
The MBA also predicts that 10% of commercial and multifamily mortgages held by nonbank lenders and investors - roughly $150.6 billion - will mature this year, a 3% decline from the $154.7 billion that matured in 2011 and an 18% decline from 2010.
Meanwhile, the MBA reports that commercial and multifamily originations during the fourth quarter of 2011 fell 7% from the third quarter, although they were up 13% over the fourth quarter of 2010.
"In the fourth quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new all-time high," says Woodwell. "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."