A trio of reports released over the last week provide a birds eye view of current conditions in commercial real estate lending. Quarter-over-quarter originations slowed, and loan delinquency worsened on securitized multifamily loans despite an overall improvement.
The Mortgage Bankers Association provided the first of the three reports, Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations | Q1 2015.
According to the trade group, U.S. commercial mortgage production
declined by more than a fourth between the final quarter of last year and the first quarter of this year.
But business was up by nearly half in a year-over-year comparison.
An analysis of current and previous MBA data indicates that first-quarter 2015 CRE loan originations were in the neighborhood of $100 billion, off from roughly $136 billion in the fourth-quarter 2014 but well above around $67 billion a year earlier.
Originations for commercial mortgage-backed securities and conduits was off 14 percent from the fourth quarter but more than doubled from the first-quarter 2014. Commercial bank CRE loan production dropped 23 percent from three months earlier and slipped 1 percent from a year earlier.
Life insurers slowed commercial mortgage production by 18 percent on a quarter-over-quarter basis but pumped up the volume by more than half from a the same three-month period last year.
Fannie Mae and Freddie Mac financed 13 percent less in multifamily loans during the first quarter than in the prior quarter. But the government-controlled duo saw volume skyrocket 306 percent from the first quarter of last year.
Fannie separately reported that it issued $10.4 billion in multifamily MBS during the three months ended March 31.
Another $3.4 billion in DUS MBS was re-securitized by the Washington-based company. In addition, $2.3 billion in ACES REMICs and NonGeMS Megas backed by DUS MBS collateral from the broker-dealer community were issued by Fannie.
Industry-wide multifamily originations were off by nearly a third from the final three months of 2014 but have ascended 71 percent from the first three months of last year, according to MBA.
A third report from Trepp LLC indicated that 30-day delinquency on CMBS loans secured by multifamily properties soared 19 basis points in April from a month earlier to 8.92 percent.
Office property loan production dropped by a fourth from the prior period and was up by more than half from the year-earlier quarter, while retail lending fell 57 percent from the previous quarter and rose 5 percent year-over-year.
Industrial property lending more than doubled from the fourth quarter and leapt 269 percent from one year prior. Hotel lending fell by a third but was up half from a year earlier, and health care property lending tumbled 62 percent from the prior period but was the same as the year-earlier period.
Trepp reported that overall 30-day CMBS delinquency
was 5.57 percent in April, down a basis point from a month earlier. A year earlier, the rate was 6.44 percent.
Helping to hold down overall CMBS delinquency were retail property loans, with the 30-day rate falling six BPS to 5.45 percent in April. Delinquency on lodging loans slipped 2 BPS to 4.18 percent.
However, last month’s delinquency rate on office loans was 6.11 percent, five BPS worse than in March. The 7.83 percent rate on industrial properties jumped 15 BPS — the most deterioration of any category.
