Commercial Mortgages Fall Almost 20% in Third Quarter 2012 Reports Mortgage Bankers Association


The Mortgage Bankers Association is a national association serving that segment of the financial industry in this country that deals in both residential and commercial real estate financing. It has its headquarters in Washington D.C., but the MBA has connections with literally every segment of the American financial industry and its analysis and reports are respected as being sound.

So when the Mortgage Bankers Association releases information regarding how the commercial real estate industry is doing from a financial perspective, industry insiders stop to consider what the MBA is opining.

“Commercial and multifamily mortgage borrowing slowed in the third quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Even though low interest rates continue to make borrowing extremely attractive, a moderate pace of commercial property sales transactions and a continued drop in the volume of commercial mortgages maturing limited the overall amount of commercial mortgage loans originated.”

This week, the Mortgage Bankers Association released its latest findings on how commercial real estate financing is doing in the United States right now by analyzing what happened in the 3rd Quarter of 2012. Here's what the Mortgage Bankers Association found, among other things: 

  • Commercial mortgage originations fell 17% from 2nd Quarter 2012 to 3rd Quarter 2012.
  • Commercial mortgage originations fell 7% comparing 3rd Quarter 2012 to 3rd Quarter 2011.
  • Most popular form of commercial real estate for financing remains multi-family properties (no surprise to anyone here in South Florida).
  • Loan origination dollar volumes for retail properties fell 35% from 2nd Quarter 2012 to 3rd Quarter 2012.
  • Loan origination dollar volumes for office properties fell 24% from 2nd Quarter 2012 to 3rd Quarter 2012.
  • Loan origination dollar volumes for health care properties fell 33% from 2nd Quarter 2012 to 3rd Quarter 2012.
  • Loan origination dollar volumes for hotel properties fell 8% from 2nd Quarter 2012 to 3rd Quarter 2012.
  • Commercial bank saw a jump of 44% in commercial mortgage loan volumes from 3rd Quarter 2011 to 3rd Quarter 2012.

The important thing for South Florida to remember when considering these numbers is that this is a national report, and what may be true for the United States overall in a broad brush may not jive with what Florida, especially South Florida and the Miami metroplex, is experiencing.

Things are different for our neck of the woods than they are in other parts of the country. For better and for worse - we're the state that has made history in foreclosure numbers - and Florida commercial real estate may be doing much differently than this national overview suggests. Still, these numbers are important to Florida and reveal something we all know: it's still a struggling economy out there for commercial real estate interests.


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