Quarterly production for the nation’s commercial real estate lenders fell to the lowest level in two years, with conduits and government sponsored enterprises driving much of the recent decline.
Originators of U.S. commercial mortgages generated 45 percent less in loan production during the three months ended March 31 than they did in the fourth-quarter 2013.
The last time CRE loan originations were as low as they were in the first quarter of this year was in the first quarter of 2012.
The latest volume was just 1 percent worse than the first-quarter 2013.
The data was included in the Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations Q1 2014.
The first quarter has historically been the slowest period of the year.
Last month, MBA reported that CRE originations amounted to $358.5 billion during all of 2013.
Using the earlier MBA dollar volume data and the index from today’s report, Mortgage Daily estimates that first-quarter 2014 commercial mortgage production totaled just $64.4 billion, falling from $117.7 billion three months earlier and slipping from $64.9 billion a year earlier.
Compared to the fourth-quarter 2013, CRE loans originated for commercial mortgage backed securities and conduits sank 57 percent — the most of any lender type
Business at Fannie Mae and Freddie Mac was next, dropping by 53 percent, followed by a 42 percent decline at life insurance companies. At just 28 percent, commercial banks had the smallest decline.
Compared to the first-quarter 2013, activity at Fannie and Freddie fell 55 percent. CMBS/Conduits were off 21 percent.
But banks saw a 55 percent surge, while life insurer originations were up 18 percent.
The biggest quarter-over-quarter decline by property type was health care, with production plummeting nearly two-thirds. Financing for office properties, retail properties and hotels was off by at least half from the fourth-quarter.
Multifamily and retail property loans were the only property types to show year-over-year deterioration. Industrial property loan production was up 52 percent — more than any other category.
