Last year proved to be a record setting year for commercial and multifamily mortgage bankers as loan originations increased 16% to $136 billion from $117 billion recorded in 2003, announced the Mortgage Bankers Association in a news release last week.

Overall, office and retail lending showed the largest increases in 2004, as office loans soared up $7.2 billion and retail loans rose to $4.7 billion from the year prior, said MBA. Other property type boosts included a $1.8 billion increase in industrial loans, and a $1.5 billion increase in multifamily property loans.

Meanwhile, investor type volumes indicated commercial banks had the largest increase at $9.1 billion, while life insurance companies followed in second with an increase of $4.9 billion. In addition, CMBS conduits increased by $2.4 billion, and Freddie Mac increased by $1.9 billion. Fannie Mae and the Federal Housing Authority witnessed a decrease by $1.9 billion and $1.3 billion respectively.

CMBS conduit loan originations totaled $41.2 billion over 30% of the year's total. Life companies originated $29 billion or 21.3% of the total, while commercial bankers originated $26.1 billion or 19.1% of the total for commercial banks. Together, Fannie Mae and Freddie Mac totaled $21.3 billion or 15.6% or originations.

In property groups, multifamily properties represented 50.4 billion of loans or 37.3% of total originations - a 41.6% decrease from 2003. Office lending had $33.2 billion in originations (23.5% of the total), and retail originations constituted for $24.8 billion or 18.3% of the pie.

Earnings from loan originations in the fourth quarter totaled $42.7 billion - the highest ever recorded in MBA's quarterly survey. Lending was up $7.1 billion from an already strong third quarter, as the industry pushed to settle deals before the end of the year, MBA said in its release. In terms of percentage, health care lending led the quarter-over-quarter increase, with a 72.5% increase from the third quarter to the fourth quarter. Hotel lending came in second with a 51.5% increase, and multifamily lending increased by 17.9%. Among investor types, Freddie Mac increased by 59.1% from the third quarter to the fourth quarter, credit companies increased by 50.6%, and CMBS conduits rose by 41.8%, MBA reported.

In addition to showing an increase over 3Q04, 4Q04 also showed a sharp $3.8 billion increase over 4Q03. The increase in volume comprised of a $1.1 billion rise in office lending and a $0.5 billion rise in hotel lending among property types. In addition investor type numbers showed a $3 billion increase for CMBS conduits, and a $2.4 billion increase for commercial banks, whereas commercial mortgage bankers' originations for Fannie Mae fell by $900 million.

Copyright 2005 Thomson Media Inc. All Rights Reserved.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.