Industrial and Multi-family Loans Drive Annual CRE Increase

The Mortgage Bankers Association
(MBA) reports that commercial and multifamily loan originations were down 7
percent in the fourth quarter of 2011 compared to the third quarter but were 13
percent higher than originations in the fourth quarter a year earlier.  The year-over year change was driven by
originations for both industrial and multifamily properties which increased 43
percent and 31 percent respectively from Q4 2010.  On the negative side, retail loans were down
8 percent, loans for healthcare properties fell 24 percent, office properties
were down 29 percent and hotel originations decreased 44 percent.

Quarter over quarter results were
mixed.  There was a 153 percent jump in
originations for health care properties; industrial loans were up 51 percent
and multifamily properties increased 29 percent.  Originations for healthcare properties fell 52
percent, office properties were down 39 percent, and retail property loans
decreased 24 percent.

Looking at lending by investor groups,
commercial bank portfolios were up by 122 percent compared to the fourth
quarter of 2010 and Freddie Mac and Fannie Mae (the GSEs) increased lending 17
percent.  Life insurance companies and
conduits for commercial mortgage backed securities (CMBS) decreased lending by
23 percent and 50 percent respectively.

 On a quarter-over-quarter basis only the GSEs
increased their loans, which rose 34 percent to an all time high.  Conduits for CMBS were down 26 percent, life
insurance companies decreased lending by 23 percent, and commercial bank
portfolios declined by 16 percent.  

“MBA’s Commercial/Multifamily
Mortgage Bankers Origination Index hit record levels for life insurance
companies in the second and third quarters of 2011,” said Jamie Woodwell,
MBA’s Vice President of Commercial Real Estate Research. “In the fourth
quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new
all-time high. While the CMBS market continued to be held back by broader
capital markets uncertainty during the past year, others – like the GSEs, life
companies and many bank portfolios – increased their appetite for commercial
and multifamily loans.”

Commercial/Multi-family
Originations by Investor Types

Investor
Type

Origination Volume Index*

% Chg

Q4-Q4

Average Loan Size ($millions)

Q3 2011

Q4 2011

Q3 2011

Q4 2011

Conduits

42

31

-50

30.5

23.9

Commercial
Banks

169

143

122

11.8

7.8

Life
Insurance

282

216

-13

20.5

14.0

GSEs

176

236

17

13.8

14.3

Total

138

129

13

14,9

11.6

*2001 Ave. Quarter = 100

Commercial/Multi-family
Originations by Property Types

Investor
Type

Origination Volume Index*

% Chg

Q4-Q4

Average Loan Size ($millions)

Q3 2011

Q4 2011

Q3 2011

Q4 2011

Multi-family

140

181

31

13.2

13.5

Office

91

56

-29

19.1

11.7

Retail

222

169

-8

20.9

12.3

Industrial

142

214

43

12.4

16.2

Hotel

231

110

-44

39.0

20.1

Health
Care

91

229

-24

7.2

12.4

*2001 Ave. Quarter = 100

…(read more)

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City Room: Big Ticket | Sold for $19,000,000

An apartment at the Trump International Hotel and Tower, opposite Central Park, was bought anonymously through a limited liability company.



Trump: Banks to Blame for Hotel Malaise

Associated Press
Donald Trump, shown here in New York in December.

LOS ANGELES — The U.S. hotel industry would be faring even better and perhaps expanding with new construction if it weren’t for banks’ reluctance to lend to the hotel industry. So says Donald Trump, long-time hotelier and television personality who flirted with a presidential run.

“Unless banks start loaning money to developers who have good projects but will never get them off the ground, you won’t see much happening,” Mr. Trump said Tuesday during a press conference at the Americas Lodging Investment Summit conference in Los Angeles. “There’s very little development because, for the most part, the banks aren’t loaning for development or acquisitions.”

Lending on commercial real estate projects indeed has fallen off, particularly from the frothy days of the real-estate boom. European banks, previously active lenders to U.S. hotels, mostly have stopped originating new hotel loans or sold their U.S. loan portfolios in government-mandated steps. Many U.S. banks remain mostly subdued in their lending to hotels, leaving relatively healthy Wells Fargo & Co. as the most active lender to the sector. Meanwhile, the market for commercial mortgage-backed securities continues to struggle to get on its feet again.

In response to questions, Mr. Trump said that many banks can’t lend due to restrictions such as capital requirements placed on them by regulators. “I know some bankers who are very good bankers and they’d like to do certain deals but they can’t because the regulators are telling them not to,” Mr. Trump said.

Mr. Trump delivered a keynote speech at the ALIS conference in which he remarked on his well-known distaste for the policies of President Barack Obama and discussed his hotel-management venture, the Trump Hotel Collection. The company manages seven Trump-branded hotels, including those in Chicago, Las Vegas and near Manhattan’s Central Park. He said the company is considering 10 deals across the globe.

Other pending hotel deals involving Mr. Trump includes his $150 million stalking-horse offer to buy the 692-room Doral Golf Resort & Spa near Miami from hedge fund Paulson & Co. and Winthrop Realty Trust, which put the resort and four others under bankruptcy protection in early 2011. Trump had lowered its offer to $150 million from an earlier $170 million, explaining that the Doral needs roughly $200 million in upkeep and renovations.

Mr. Trump declined in an interview to comment on his effort to buy the Doral. However, a person familiar with the deal said Trump must be paid $10 million as the initial bidder if a rival bidder eventually tops his price for the property.

On Location: In Greenwich Village, a Place to Rest in Luxury — On Location

Frank Carfaro, the president of the SoHo furniture company Desiron, renovated his small apartment to feel like a super-luxe hotel.



Kansas City’s Power and Light Building Awaits New Role

The 81-year-old Power and Light Building in Kansas City is no longer viable as office space, but some developers say it has potential as apartments or a hotel.