WASHINGTON, DC - Money continued to flow into the commercial/multifamily sectors during 2008, with commercial banks holding the largest share of mortgages – at 44 percent of the $3.5 trillion year-end total, according to data released by the Mortgage Bankers Association.
The fourth quarter commercial/multifamily mortgage total included an increase of $23 billion, up 0.7 of a percent from the third quarter, while multifamily mortgage debt alone grew to $900 billion, an increase of $5.4 billion, or 0.6 of a percent, from the third quarter. Year-over-year, commercial/multifamily mortgages increased by $166 billion, up 5 percent from the end of 2007.
"Counter to what many expected, investors increased their holdings of commercial and multifamily mortgages during the fourth quarter," said Jamie Woodwell, the MBA's VP of commercial real estate research, in a statement.
The Washington, D.C.-based trade association comprising more than 2,400 companies involved in real estate finance, analyzed Federal Reserve Board "flow of funds" data to compile the report.
Commercial banks, thrift institutions and life insurance companies, along with government sponsored entities Fannie Mae and Freddie Mac, extended additional credit during 2008, lending more in new commercial and multifamily mortgages collectively than they saw paid off or paid down on existing loans.
The split between owner-occupied versus income properties was fairly even among the top 10 commercial (non-multifamily) lenders, with 48 percent owner-occupied properties and 52 percent being income property loans.
But, 2009 may not look as bright, especially in South Florida. "It's still a tough market," said J.R. Steinbauer Jr., a Miami-based Realtor who specializes in industrial, office and retail sales.
He explained that it's much harder to qualify deals than it has been over the last few years – and there is no "free money" kicking around. "The commercial lenders that are active today only want loans where the numbers and ratios make sense," he said.
Source: South Florida Business Journal