The commercial and multifamily markets are healing, the Mortgage Bankers Association (MBA) reports in its Commercial Real Estate/Multifamily Finance Quarterly Data Book for the fourth quarter of 2010. Improved property fundamentals, modest economic improvement and increased originations all played into the markets’ slight rebound.
Mortgage bankers originated $110 billion of commercial and multifamily real estate loans last year, which is a 36% increase over 2009. Originations jumped 63% in the fourth quarter of 2010.
“Life companies and [the Federal Housing Administration] led the increase in dollar volumes, but a large percentage increase in originations for [commercial mortgage-backed securities (CMBS)] was likely the most symbolic change from last year,” Jamie Woodwell, the MBA’s vice president of commercial real estate research, said in the report.
The improved property fundamentals are helping buoy sentiment in the market, which translates to more sales transactions and improved property pricing, the MBA says.
Last year, sales of apartment buildings were up 107%, industrial properties up 95%, office properties up 152% and retail properties up 52%.
The performance of loans held by Fannie Mae, Freddie Mac and life insurance companies was fairly stable, and delinquency rates among banks and thrifts have begun to fall from their recent peaks. However, the delinquency rates for CMBS loans continue to rise.