In 2010, commercial and multifamily mortgage origination volumes increased to $118.8 billion, up 44% compared to 2009, according to the Mortgage Bankers Association (MBA). And first liens accounted for 92% of the total dollar volume closed.
The MBA’s 2010 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation shows that investor confidence in the commercial and multifamily market has significantly improved leaving behind “the 2009 lows.”
In 2010 Fannie Mae, Freddie Mac and Federal Housing Administration collectively represented the largest investor group responsible for $42.8 billion of the total. At $30.6 billion of the total, life insurance companies and pension funds were the second largest investor group.
The crisis-driven increase in demand for rental housing options is one of the reasons behind the increase in the volume of multifamily property originations to $48.9 billion.
Yet lending for office properties had the largest percentage increase in originations by property type. The volume of office property originations however was at $22.6 billion at almost half that of multifamily property originations.
Insiders expect last year’s strong growth to continue in 2011 fueled by still low interest rates and further improvements in economic fundamentals, which “have the potential” to draw out even more borrowers and investors.