Multifamily Loans Jump 33%; Office Construction and Health Care Funding Dips

Commercial and apartment loan originations in 2001 totaled $73.8 billion, a 19% increase over the $62 billion posted in 2000. Multifamily properties, as industry analysts had predicted, accounted for 48% of the record loan volume. In 2000, multifamily loans were 43% of the total.

Overall originations are up sharply. In 2000, the number was $11.2 billion in Q1; $13.8 billion in Q2; $14.3 billion in Q3 and $22.8 billion in Q4. In 2001, originations totaled $15 billion in Q1; $17.7 billion in Q2; $18.7 billion in Q3; and $22.5 billion in Q4.

Health care properties were at the bottom of the loan origination list, dropping 50% or about $1 billion. Down, too, was lending for office building properties. Office loans accounted for 23% of the total lending versus 28% in 2000. Retail properties lending was up.

While the fourth quarter historically has the highest level of originations for the year, the last period in 2001 was off from the comparable 2000 period. Originations in Q4/2001 totaled $22.5 billion, up from $18.7 billion in the third quarter but down from $22.8 billion in Q4/2000. The $22.8 billion mark rose from $14.3 billion in Q3/200.

"The smaller change between the third and fourth quarters of 2001 is most likely due to tighter credit standards associated with the recent downturn in the economy, increased office vacancies and problems in the hospitality industry," the MBA's research department says in a prepared statement.

Life Insurance companies, CMBS conduits and a combination of Fannie Mae and Freddie Mac each provided about a quarter of the funding. Banks, credit firms and pension funds accounted for the balance.

Fannie Mae's total in 2001 increased by $4.5 billion or a 55% jump over 2000. Freddie Mac-funded loans rose $2.9 billion, up 86% over 2000. Shares of loans originated for life companies and CMBS conduits stayed about the same in 2001 versus 2000. But life company share dropped to 24% from 25%; CMBS conduit share increased to 25% from 24%.