Strong Organic Growth Pushes Annual Volume Up 11% to $118 Billion
STAMFORD, Conn -- May 5, 2006-- Originations of small-balance commercial mortgages topped $30 Billion in the fourth quarter of 2005 as this specialized loan space continued to reveal strong organic growth according to the latest TrendLines report from Stamford, CT-based Boxwood Means, Inc. For all of 2005, Boxwood reports that deal volume topped $118 Billion, an increase of 11% over the prior year.
Highlights of the TrendLines research include:
- In the small-balance loan market under $5 million, volume rose to $31.3 Billion in the fourth quarter, up 8% year over year.
- Annual loan volume across the U.S. rose 10% to $118 Billion. This organic or demand-driven growth is sizable, given the relative absence of capital market pressure associated with the larger institutional mortgage market. The total number of small-balance loans, comprising both property investor and owner-occupied financings, increased nearly 4% to nearly 180,000 transactions during the last year.
- Property sales in this segment have not been immune to the feeding frenzy in the larger commercial market: sales were up 6% year-over-year totaling $138 Billion. The average value of property sales was $879,000, up 11% from 2004.
- Los Angeles repeated as the top county for originations in the U.S. during 2005 with over 10,000 transactions valued at $9.6 Billion. Cook County (IL) was ranked second.
- Washington Mutual led all lenders in the small-balance market in 2005 with 4% market share, followed by Wells Fargo, Bank of America and Wachovia at 2% each. Individuals and sellers that furnished private financing accounted for 5% of all deal volume, reflecting the continued prevalence of seller financing in this space as well as the market’s overall fragmentation.