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Commercial Production Down by Over Half

Commercial Production Down by Over Half$181.4 billion commercial mortgage production in 2008

June 4, 2009

By staff

Commercial mortgage originations dropped by nearly two-thirds last year and might fall further.Volume, including multifamily activity, was $181.4 billion during 2008, the Mortgage Bankers Association reported today. Fundings sank from $507.7 billion previously reported for 2007.

Mortgage brokers were involved in $61.2 billion of last year’s activity.

Around $64.4 billion of 2008 volume was originated for commercial banks and thrifts, while life insurance companies funded $28.3 billion. Fannie Mae funded $22.4 billion, Freddie Mac acquired $17.7 billion and credit companies handled $11 billion. Around $4.0 billion in loans were originated as part of asset-backed securities.

Multifamily production was $64.6 billion, office financings were $31.5 billion and retail property lending was $22.7 billion. Industrial originations were $13.8 billion, hotel-motel lending was $10.8 billion and health care production was $6.0 billion.

“The continuing credit crunch, a relatively low volume of commercial mortgages maturing in the coming years and little incentive for property owners to sell their properties all continue to put downward pressure on origination volumes,” MBA commercial executive Jamie Woodwell said in the statement.

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