A dearth of financing for acquisition and development has plagued commercial real estate and the general economy for the better part of two years. But a study by the Mortgage Bankers Association published late last week suggests that commercial real estate lending actually started increasing at the end of 2008. \u201cCounter to what many expected, investors increased their holdings of commercial and multi-family mortgages during the fourth quarter,\u201d said Jamie Woodwell, MBA\u2019s vice president of research, in a statement accompanying the report. \u201cBanks, thrifts, Fannie Mae, Freddie Mac, life insurance companies and other lenders extended additional credit to the market during the fourth quarter.\u201d Those capital sources, he noted, provided more financing for new mortgages than the debt than was retired or paid down during the year. MBA based its conclusion on an analysis of the Federal Reserve\u2019s Flow of Funds. Total outstanding commercial and multi-family debt increased by a combined $166 billion during 2008, ending the year at $3.5 trillion. That increase includes a $23 billion increase during the fourth quarter. Commercial banks hold $1.5 trillion of the $3.5 trillion total, although MBA notes that the total includes many loans underwritten to the borrower\u2019s business income rather than the income generated by the property itself. A single blockbuster merger in the banking industry gave commercial banks the single largest increase in commercial and multi-family mortgage debt: JPMorgan Chase & Co.\u2019s acquisition last year of Washington Mutual, a savings bank. That deal generated much of the $152 billion increase in commercial banks\u2019 share of outstanding commercial and multi-family debt, which stood at $1.55 trillion by the end of last year. In other findings: \u2022\tAsset-backed security issues, notably CMBS and collateralized debt obligations, hold the second-largest volume of commercial and multi-family mortgages–$746 billion, or 21 percent of the total. Life insurance companies hold 9 percent of the total outstanding mortgages, and savings institutions have 5.5 percent.\u00a0\u2022\tFannie Mae, Freddie Mac and Ginnie Mae\u2019s multi-family holdings total 10 percent of the all outstanding commercial and multi-family mortgages, including $189 billion in whole loans and $149 billion in securitized asset-backed loans. \u2022\tThe outstanding commercial and multi-family debt held by government-sponsored enterprises grew by $42 billion in 2008, a 28 percent increase. During the fourth quarter, their holdings of commercial and multi-family mortgages increased 0.6 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"
A dearth of financing for acquisition and development has plagued commercial real estate and the general economy for the better part of two years. But a study by the Mortgage Bankers Association published late last week suggests that commercial real estate lending actually started increasing at the end of 2008. \u201cCounter to what many expected,…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825],"tags":[],"class_list":["post-1003954002","post","type-post","status-publish","format-standard","hentry","category-finance"],"acf":[],"yoast_head":"\n