Events Global Real Estate Institute European Summit 2007 September 10-11, 2007 Paris ICSC Research Conference September 16-18, 2007 Toronto California Mortgage Bankers Association 10th Annual Conference September 24-26, 2007 Las Vegas

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Investment Notes

Commercial loan originations were once again strong in the second quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey. Second quarter originations were 40 percent higher than compared to the same period last year. The increase was seen across most property types and investor groups.

Increases in total commercial/multifamily mortgage originations were led by increases in commercial mortgage-backed securities (CMBS) conduit loans. The strong second quarter included heavy volume driven by REIT privatizations and continues a trend of second-quarter-over-second-quarter increases going back to the beginning of MBA's survey in 2001.

"A number of large deals helped boost commercial/multifamily origination volumes in the second quarter," said Jamie Woodwell, MBA's senior director of Commercial/Multifamily research. "Overall, second quarter commercial/multifamily originations remained strong despite the initial phases of a general re-pricing of risk in the commercial/multifamily and other capital markets."

CMBS conduits saw an increase of 77 percent compared to last year, while Government Sponsored Enterprises such as Fannie Mae and Freddie Mac experienced a 14 percent increase. Commercial bank portfolios and life insurance companies saw their volume decrease by 11 percent and 15 percent respectively.

The increase in commercial/multifamily lending activity during the second quarter was driven by increases in originations for most property types. When compared to the second quarter of 2006, the overall increase included a 330 percent increase in loans for hotel properties, a 34 percent increase in loans for retail properties, a 19 percent increase in loans for office properties, a 18 percent increase in loans for multifamily properties, as well as a 14 percent decrease in loans for health care properties and a 7 percent decrease in loans for industrial properties.

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