Magazine article Mortgage Banking

Commercial/multifamily Originations Start Strong in 2003. (Commercial)

Magazine article Mortgage Banking

Commercial/multifamily Originations Start Strong in 2003. (Commercial)

Article excerpt

ACCORDING TO THE MORTGAGE BANKERS Association of America's (MBA's) quarterly survey of key commercial members, mortgage bankers originated new commercial/multifamily mortgages at a brisk pace during the first quarter of 2003. The $18.9 billion volume reported by survey participants was 38 percent higher than for the same period a year earlier. While the first-quarter lending pace fell noticeably from the $29.4 billion reported for the fourth quarter of 2002, a drop-off is normally seen early in the year after the customary surge in year-end activity.

"The strength of commercial mortgage activity reflects the effect of low interest rates and the continuing opportunity for many owners to refinance their loans on commercial properties," said Douglas Duncan, MBA senior vice president and chief economist. "The pace of new lending is particularly impressive in light of uncertainties during the first quarter about the future of economic growth, the weak fundamentals in many commercial real estate markets and the course of the war in Iraq. The 10-year Treasury rate averaged less than 4 percent during the first quarter, and spreads on commercial mortgage-backed securities fell noticeably early in the year.

The first-quarter increase was buoyed by marked increases in investment in commercial mortgages by CMBS conduits (up 53.2 billion, or 86 percent from a year earlier) and by commercial banks (up $967 million, or 50 percent). Other sectors registering healthy year-over-year percentage increases included credit companies and pension funds. Life insurance company activity was little changed from a year earlier. CMBS conduit was by far the largest investor class, with 36 percent of the total volume in the first quarter. Life companies and commercial banks purchased 17 percent and 15 percent of the loans originated by the survey respondents, respectively. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.