Quarterly commercial mortgage originations jumped.
U.S. commercial production jumped 26 percent from the first quarter to the second quarter, the Mortgage Bankers Association announced today. Volume was 40 percent better than a year earlier and the highest of all quarters since the beginning of 2001.
MBA noted a number of large deals contributed to the increase -- pushing the average loan size to $15.6 million from $13.8 million the prior period and $11.1 billion the previous year.
While the increase was seen across most property types, growth in hotel financing was exceptionally strong at 285 percent greater than the first quarter and 330 percent higher than the second quarter 2006. But health care facilities financed dropped 14 percent from the previous year and industrial financing was off 7 percent.
When compared to the first quarter 2007, only office and health care originations fell.
"The strong second quarter included heavy volume driven by real estate investment trust privatizations and continues a trend of second-quarter-over-second-quarter increases going back to the beginning of MBA's survey in 2001," MBA said.
Commercial mortgage-backed securities issuance was $76 billion during the second quarter, up from $61 billion in the first quarter and $42 billion a year earlier.
Commercial mortgage debt outstanding exceeded $3.1 trillion on June 30, MBA said. Commercial bankers held 43 percent of the outstanding, while 23 percent was held in mortgage securities and 9 percent by life insurance companies.
The biggest commercial mortgage servicers were Wachovia Securities, with a servicing portfolio of 29,304 loans for $357 billion; Capmark Finance, with 37,991 loans for $252 billion; Midland Loan Services with 24,845 mortgages totaling $246 billion; Wells Fargo with 18,701 units for $153 billion; and KeyBank Real Estate Capital with 13,484 loans for $133 billion, according to the report.
The trade group forecast 2007 residential originations of $2.3 trillion, with production falling to an estimated $2.0 trillion next year.