Led by a surge in apartment lending, the origination of commercial mortgages has increased for two consecutive years. The outlook is for a continued rebound this year. Nearly a third of all new commercial mortgages are supported by the government.
U.S. commercial mortgage production was $184.3 billion last year. Volume includes commercial real estate loans and multifamily loans.
CRE financing during 2011 represented a 55 percent increase over 2010 commercial mortgage originations.
The numbers were based on the Mortgage Bankers Association’s 2011 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.
During 2010, CRE loan production was only $118.8 billion, while it was just $82.3 billion in 2009.
“Commercial mortgage lending continues to rebound from its 2009 lows,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in a statement. “Originations for life companies, Fannie Mae, Freddie Mac and FHA were all strong, and banks, commercial mortgage-backed securities issuers and others also saw strong growth.
“With interest rates still low and stability returning to real estate fundamentals, the rebound is expected to continue in 2012”
The leading investor group was the group that included the Federal National Mortgage Association, the Federal Home Loan Mortgage Corp. and the Federal Housing Administration. The government share of the commercial market was $57.6 billion. The trio of government-controlled firms was responsible for $42.8 billion in CRE volume during 2010.
The next-biggest investor group was life insurance companies and pension funds, which funded $49.3 billion in CRE loans last year. Business in the sector jumped from $30.6 billion a year earlier.
Multifamily volume was $77.4 billion, the most of any property type. Volume in the category soared from $48.9 billion during 2010.
Office property financing was No. 2 with $34.4 billion in originations, also stronger than 2010 when volume totaled $22.6 billion.
