MBA reports slower 1st qtr

Real Estate Weekly, Oct 11, 2000

Commercial mortgage bankers originated more than 1,500 loans, with an average loan size of $7.3 million, in the first quarter of 2000, according to a new quarterly survey conducted by the Mortgage Bankers Association of America (MBA).

Commercial lenders responding to MBA's Commercial Mortgage Banker Origination Survey reported $11.2 billion in origination volume for the first quarter. But that was down 5.3% from the same period a year ago, according to first quarter 1999 data supplied by a more limited sample of companies. Lenders originating more than $1 billion a year saw a decline of 12.7% in their originations from first quarter 1999 to first quarter 2000, while firms originating less than $300 million reported a 9.9% decline. Companies originating between $300 million and $1 billion, however, reported a year-over-year increase of 28.4%.

"The vital role the mortgage banker plays in financing commercial/multifamily properties, and therefore, our communities, is evident by the significant dollar volume of mortgage commitments originated by mortgage bankers," said Gail Davis, senior staff vice president for MBA's commercial/multifamily business group. "This survey will serve as an important benchmark in demonstrating the continued value they bring to the commercial/multifamily real estate finance sector."

Multifamily properties, the survey found, accounted for the largest share of loans originated during the quarter, with 46%. Loans for office building properties -- the second highest category -- accounted for 26.4%.

The survey also found that the investor group making the most commercial loan commitments during the first quarter was conduits-firms specializing in matching lenders with investors -- with 29%. Life insurance companies committed to 25.3% of the loans, and commercial banks committed to 10.6%. Fannie Mae, Freddie Mac, and the Federal Housing Administration made commitments of 13.3%, 5%, and 3.6%, respectively. Pension funds were the source for 1.7% of the loan commitments, while credit companies represented 1.4%; "other" commercial investors committed to just more than 10%.

The MBA survey included data from 55 commercial mortgage bankers, including all of the largest companies.