Wednesday, February 11, 2009

Commercial/Multifamily Mortgage Originations Down 80% from Q4 2007 in MBA Survey

SAN DIEGO, CA - - Commercial and multifamily mortgage loan originations dropped in the fourth quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

Fourth quarter originations were 80 percent lower than during the same period last year. The year-over-year decrease was seen across all property types and investor groups.

"Commercial and multifamily mortgage lending slowed to a trickle in the fourth quarter," said Jamie Woodwell, (top right photo) Vice President of Commercial Real Estate Research at the Mortgage Bankers Association.

"Origination levels in the fourth quarter were 80 percent below last year's fourth quarter, and originations for all of 2008 were down approximately 60 percent from 2007 levels. Between the worsening economy and the continued credit crunch, lenders are extremely cautious about lending and borrowers are likely to hold onto the assets and the loans they already have."

Decreases in total commercial/multifamily mortgage originations continued to be led by a drop in commercial mortgage-backed security (CMBS) conduit loans and loans for commercial bank portfolios. These numbers show the impact of the recent credit crunch and other market disruptions.


The decrease in commercial/multifamily lending activity during the fourth quarter was driven by decreases in originations for all property types.

When compared to the fourth quarter of 2007, the overall 80 percent decrease included a 99 percent decrease in loans for hotel properties, an 82 percent decrease in loans for retail properties, a 76 percent decrease in loans for industrial properties, a 72 percent decrease in loans for office properties, a 62 percent decrease in multifamily property loans, and a 47 decrease in health care property loans.

Among investor types, conduits for CMBS saw a significant decrease of 98 percent compared to last year's fourth quarter.

There was also an 86 percent decrease in loans for commercial bank portfolios, a 73 percent decrease in loans for life insurance companies, and the dollar volume of loans for Government Sponsored Enterprises (or GSEs - Fannie Mae and Freddie Mac) saw a decrease of 15 percent.


Fourth quarter 2008 mortgage originations were 53 percent lower than originations in the third quarter of 2008.

Among investor types, loans for life insurance companies saw a decrease in loan volume of 73 percent compared to the third quarter of 2008, loans for conduits for CMBS saw a decrease in loan volume of 60 percent compared to the third quarter of 2008, commercial banks decreased by 43 percent during the same time span, and GSEs volume decreased 21 percent from the third quarter 2008 to fourth quarter 2008.

Compared to the third quarter of 2008, fourth quarter originations for retail properties saw a 75 percent decrease.

There was a 68 percent decrease for industrial properties, a 66 percent decrease for hotel properties, a 63 percent decrease for office properties, a 35 percent decrease for health care properties, and a 33 percent decrease for multifamily properties.

CONTACT: Jason Vasquez, (202) 557-2950,

Post Properties Announces Annual Meeting Date and Quarterly Dividends

ATLANTA, GA, (Business Wire) -- Post Properties, Inc. (NYSE: PPS), an Atlanta-based real estate investment trust, announces that its 2009 Annual Meeting of Shareholders will be held on June 9, 2009 in Atlanta, Georgia.

The record date for determining shareholders entitled to notice of and to vote at the Annual Meeting is April 15, 2009.

(Dave Stockert, top right photo, is chairman of Post Properties)

Post also announced quarterly dividends on its common stock of $0.20 per share for the first quarter of 2009. The CompanyĆ¢€™s annual dividend rate is $0.80 per common share. The dividend is payable on April 15, 2009 to all common stock shareholders of record as of March 31, 2009.

Post also announced regular quarterly dividends for its 8.5 percent Series A Cumulative Redeemable Preferred Stock and its 7 5/8 percent Series B Cumulative Redeemable Preferred Stock.

On its 8.5 percent Series A Cumulative Redeemable Preferred Stock, Post declared a regular quarterly dividend of $1.0625 per share for the first quarter. The dividend is payable on March 31, 2009 to all Series A preferred stock shareholders of record as of March 15, 2009.

On its 7 5/8 percent Series B Cumulative Redeemable Preferred Stock, Post declared a regular quarterly dividend of $0.47656 per share for the first quarter. The dividend is payable on March 31, 2009 to all Series B preferred stock shareholders of record as of March 15, 2009.

Contact: Post Properties, Inc., Dave Stockert, 404-846-5000

Singapore and Kuwait Report Billions Lost in Sovereign Wealth Funds

WASHINGTON, DC--The Voice of America reports Singapore and Kuwait are reporting billions of dollars in losses to their sovereign wealth funds in the latest symptom of the global economic crisis.

The Singapore state investment firm Temasek Holdings says the value of its investments plunged about 31 percent to $81 billion between March and November of last year.

Temasek has invested heavily in troubled banking companies, including U.S.-based Merrill Lynch and Britain's Barclays.
(The Kuwait Towers in Kuwait City, top right photo)

Kuwait's sovereign wealth fund also has taken a big hit from the credit crisis.

A Kuwaiti lawmaker, Walid al-Tabtabai, says the oil-rich country has lost about $31 billion of its estimated $300-billion fund. Lawmakers say the loss happened last year between March 31 and December 31. They spoke Tuesday after a briefing by the Kuwait Investment Authority.

A sovereign wealth fund is a government-run investment fund that can be used to stabilize a country's budget, support economic and social development, or push a political agenda.

The funds are made up of stocks, bonds, real estate or other financial instruments funded by foreign exchange assets. More than two dozen countries hold trillions of dollars in assets in such funds.
(Singapore skyline, bottom left photo)

Many have invested in U.S. banks and financial institutions, but the recent economic crisis has made some investors nervous.China's sovereign wealth fund announced in December that it did not dare to invest more in Western financial institutions because of their governments' uncertain policies.

VOA states some information for this report was provided by AFP and AP

The Voice of America, which first went on the air in 1942, is a multimedia international broadcasting service funded by the U.S. Government through the Broadcasting Board of Governors. VOA broadcasts approximately 1,500 hours of news, information, educational, and cultural programming every week to an estimated worldwide audience of 134 million people.

Grubb & Ellis's Bach Predicts Soft Market for Next Several Months

SANTA ANA, CA--Grubb & Ellis Co. senior vice president and chief economist, notes in his periodic market reports:

The current recession, which began in December 2007, is in its 14th month, making it the third longest of the 12 postwar recessions.

If it extends past April, a near certainty, it will surpass the 16-month recessions that began in July 1981 and November 1973, making it the longest since the 43-month contraction from 1929 to 1933.

Thus far in the current recession, the labor market has shed 3.6 million payroll jobs, including 598,000 in January alone. This is a decline of 2.6 percent from the peak, slightly more than the 2.4 percent decline during the comparable period of the 1981-82 recession, with which the current downturn is most often compared.

(Payroll Job Losses Current Versus 1981-82 Recession Chart, middle left image.)

However, the January unemployment rate of 7.6 percent remains well below the peak of 10.8 percent registered in November and December of 1982.

The labor market lags the broader economy, which is unlikely to recover until the housing market stabilizes, lenders and investors can measure the full extent of their losses, and credit begins flowing again. That will be a gradual, halting process.

Commercial real estate leasing activity, which lags the labor market, is in effect a double lagging indicator of the broader economy, meaning that conditions will be soft for the next couple of years.

Source: BLS, NBER, Grubb & Ellis

For more information or to speak with Bob Bach, please contact Janice McDill at 312.698.6707.