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Commercial & multi-family loan originations up 107%, recovery certain?

Kansas City skyline complete with cranes, photo by Maureen Didde.

Originations up 107 percent

Commercial and multifamily mortgage loan originations rose 107 percent from the second quarter of 2010 to the second quarter of 2011, according to the Mortgage Bankers Association. The sector’s originations rose 52% from just the first quarter of the year, showing signs of major improvement.

In July, Moody’s indicated commercial real estate was improving and that the multi-family sector was performing quite well. In recent years, some analysts have opined that the commercial real estate sector may not recover for many years, and current news is beating expectations.

In the interest of fairness, improvement of any business sector that is beyond anemic looks dramatic and can fuel optimism despite the disproportionate level of improvement compared to other sectors.

Commercial/multifamily continues to rise

“Commercial/multifamily mortgage borrowing and lending continues to rise from the depths of 2009 and 2010,” said Jamie Woodwell, MBA’s Vice President of commercial real estate research.

“Greater stability in property fundamentals and prices, and an improving sales market, are providing greater clarity for borrowers and lenders alike. Property values and interest rates—coupled with job growth, consumer spending, household growth and other macro-economic trends that drive demand for commercial real estate—will be keys to how property owners seek and qualify for mortgage financing going forward,” Woodwell added.

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What differs in this report compared to those of the recent past is that all types of commercial and multi-family property improved as opposed to being carried by any one type.

Full MBA report:

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

28 Comments

28 Comments

  1. Manhattan Beach Agent

    August 6, 2011 at 1:11 pm

    This is welcome news given the S&P AAA downgrade for the U.S., and recent market volatility. Hopefully recent events don't reverse this trend of commercial real estate rebound!

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