Commercial/Multifamily Originations Plummet 46% in 2009

For all of 2009, commercial and multifamily mortgage origination volume tumbled 46 percent to $82.3 billion, the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) reported Thursday.

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""Relatively few commercial mortgages were made in 2009, as the recession curtailed both the supply of and demand for new mortgage debt,"" said Jamie Woodwell, MBA's VP of commercial real estate research. ""As the recession has receded, origination volumes have picked up slightly, but the absolute levels remain low.""

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According to MBA's report, commercial banks and savings institutions were the largest single investors group for commercial and multifamily mortgages â€" responsible for $19.8 billion, or 24 percent, of the closed loan volume. And multifamily properties were the dominant property
type â€" representing $36.5 billion, or 44 percent, of the lending total.

MBA said decreases were seen across most property types and investor groups. These declines were led by reductions in loans intended for credit companies, REITS, mortgage REITs, investment funds, commercial mortgage-backed securities, collateralized debt obligations, and other asset-backed security conduits.

Lending for office properties had the largest percentage decrease in originations by property type, followed closely behind by retail properties and hotels/motels.

On a positive note, loans closed for the Federal Housing Administration/Ginnie Mae surged 168 percent from 2008. However, multifamily loans closed for Fannie Mae declined 32 percent, and loans closed for Freddie Mac fell 24 percent. Despite this year-over-year decline, loans for Fannie and Freddie accounted for 85 percent of the total reported multifamily volume in 2009.