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Q1 Showed 9% Increase in Commercial and Multifamily Originations

Los Angeles – April 30, 2017 – The MBA release their Quarterly Index of Commercial/Multifamily Mortgage Bankers Originations for the first quarter of 2017, showing a nine percent increase in commercial and multifamily mortgage loan originations for the first quarter of 2017, compared to the same period last year. In line with the seasonality of the market, first quarter originations were 27 percent lower than the fourth quarter of 2016. Multifamily properties remain the key force behind overall originations trends, with the GSEs continuing to dominate multifamily originations. Matching broader investment themes, financing backed by industrial properties also picked up, while retail declined. Click here for a link to the First Quarter 2017

Commercial/Multifamily Mortgage Bankers Index. We saw a significant slow down in the new issue market in April, as only 2 conduits priced for a total of $1.9b, bringing the YTD total to $10.6b across 11 deals. In addition, 2 SASB deals priced for a total of $1.76b, with $1.25b coming from a deal backed by a large pool of cold storage facilities. In the conduit space, the first deal of the month to price was the BNK4 deal (4/5) which was able to price tighter than the prior deal at all tranches. It took all the way until 4/28 for the second deal to price (Citi/DB), which likely benefited from the lack of supply as it was able to price its AAA LCF bond 3bps tighter than BNK4 even though interest rates were actually lower. Away from the AAA though, the mezz priced wider at all tranches versus the BNK4 deal. In secondary, generic non-RR spreads from AAA LCF down through the A- tranche were either side of flat, with BBB- tighter by roughly 15-25bps. Tighter trading risk retention bonds were generally wider on the month, particularly in the mezz tranches. While average to wider names were flat to tighter in the A- space, lower rates put pressure on the sub S+200 A- space which helped push the RR bond spreads wider. May is expected to be a busy month in both conduit and SASB, as dealers look to price deals before the summer starts.

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Paul TylerQ1 Showed 9% Increase in Commercial and Multifamily Originations