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Good News for Investment Commercial Real Estate Lending

Jeff Kleinschmidt Posted by Jeff Kleinschmidt | 02.18.14

Last week, I attended the annual Mortgage Bankers Association’s Commercial Real Estate Finance Conference (MBA-CREF).  This year attendance at the conference was in excess of 2,700 commercial mortgage professionals, the highest since the pre-recession levels and it’s no wonder as to why.  The increased attendance typically suggests increased capital available, which means more deal flow for commercial real estate borrowers.

According to the MBA, in the third and fourth quarters of 2013, commercial and multifamily mortgage originations were up 34% between this same period in 2012.  Originations for the full year 2013 were 15% higher than in 2012.  MBA also projects originations will grow to $300 billion in 2014, an increase of 7% from 2013 volumes, and continue to rise to $333 billion in 2016.

A great deal of this growth in loan volumes can be attributed to “CMBS 2.0” (Commercial Mortgage Backed Securities).  At the height of CMBS 1.0 in 2007, this segment of the commercial and multifamily loan originations exceeded $250 billion.  But as the credit markets subsequently froze, the amount of CMBS loans quickly ground to a halt with virtually no loans originated in 2009.

In 2012, CMBS loan volumes rose to $43 billion and grew in 2013 to $78 billion.  In 2014, CMBS loans are expected to reach $130 billion in volume, fueling much of the increased overall activity*.  We think this bodes well for borrowers who have been waiting for more competitive terms.  Most CMBS shops we met with predict more competition for deals this year, resulting in reduced interest rates and better terms for borrowers.

United is excited about this increased competition, and wants to ensure its clients take advantage of the benefits that this competition is creating. Our aim is to work together with our clients to develop the best solution to meet their commercial real estate financing objectives.

Please feel free to contact me directly about how this competition for CMBS loans can benefit your business.  CMBS is just one avenue that we can explore together, Agency (HUD and Fannie Mae) and Life Insurance Companies  are other avenues  we can discuss.

Talk with me about your goals and challenges. Let’s look for a small business solution together.

Email Jeff  | 734.926.3000

*Source:  Commercial Mortgage Alert January 31, 2014 Issue

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