Multifamily Originations Hit Record in 2007 Despite Mid-year Slowdown

By Anuradha Kher, Online News EditorWashington, D.C.–The commercial/multifamily originations market grew 19 percent in 2007, with mortgage bankers closing $507.7 billion in commercial/multifamily loans, according the Mortgage Bankers Association’s 2007 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.“Despite the slowdown, 2007 saw a record high in originations because during the first half of 2007, originations were going strong,” Jamie Woodwell (pictured), senior director of commercial/multifamily research at MBA, tells MHN. “The numbers were 38 percent ahead of 2006.”The credit crunch had a significant impact on conduit financing, but GSEs and multifamily lending was strong, said Woodwell. He said the 2007 numbers show “both the importance of the CMBS market to commercial real estate finance and the depth of other funding sources, such as banks and thrifts, life companies, Fannie Mae, Freddie Mac and others.”Increases were seen across most property types and most investor groups, and were led by increases in loans for office buildings and loans intended for commercial mortgage-backed security (CMBS), collateralized debt obligations (CDO) and other asset-backed security (ABS) conduits. Intermediated loan volume grew 15 percent between 2006 and 2007 Conduits were the largest single investor group for these mortgages – responsible for $225.2 billion, or 44 percent of the closed loan volume. “2006 and 2007 were extraordinary because Freddie Mac, Fannie Mae, ABS conduits as well as real estate investment trusts and life insurance companies performed strongly.” Lending for office properties once again was the leader in property type originations for 2007, followed closely by multifamily, for which lending saw increases.