Commercial, Multifamily Lending Has Best Quarter Since '08

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Commercial and multifamily mortgage lending just had its best quarter since 2008, a new study found.

Commercial and multifamily mortgage debt rose by 0.9% in the fourth quarter from a year earlier, to $21.8 billion, marking the highest year-over-year improvement since the second quarter of 2008, the Mortgage Bankers Association said Monday.

Banks and thrifts took on $17.1 billion of the debt, a 2.1% increase from the fourth quarter of 2011. Government-sponsored entities took on $7.6 billion, a 2% rise. The increases were offset by securities issuers, which decreased their holdings of commercial/multifamily debt by $6 billion, or 11.3%.

Total mortgage debt rose by $29.7 billion, or 1.2%, from the end of 2011.

Multifamily mortgage debt rose 1.4% from Sept. 30 and 4.4% from a year earlier, to $846 billion at Dec. 31. Government-sponsored entities hold $376 billion, or 45%, of multifamily mortgage debt; banks and thrifts hold $234 billion, or 28%.

The study looked at loans and securities backed by loans. Commercial banks held the largest share of commercial/multifamily mortgage debt, at $836 billion, or 35% of the total. Securities issuers held the next largest portion of debt, at $561 billion, or 23%. Government-sponsored entities held $376 million, or 16%, while insurance companies held $326 million, or 14%.

"The appetite among lenders and investors for commercial and multifamily mortgages grew," Jamie Woodwell, vice president of commercial real estate research for the MBA, said in the news release. "Bank-held commercial mortgages increased by the largest amount since 2008. The balance of loans held in CMBS rose by the most since 2007 and the balances of loans held by life companies and held or guaranteed by Fannie Mae, Freddie Mac and FHA continued their multi-year increases."

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