mba q1 2011 commercial/multifamily quarterly databook

MBA COMMERCIAL REAL ESTATE / MULTIFAMILY FINANCE

QUARTERLY DATABOOK

Q1 2011

10628

© June 2011 Mortgage Bankers Association. All rights reserved.

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10628

MBA COMMERCIAL REAL ESTATE / MULTIFAMILY FINANCE

QUARTERLY DATABOOK

Q1 2011

Treasury Yield Curve Percent

Source: Federal Reserve Board

Multifamily Permits, Starts and Completions Thousands, Seasonally adjusted annual rate

Source: Census Bureau

First Quarter 2011

Selected Charts

Month-over-month Change in At-Place Employment Thousands of jobs

Source: Bureau of Labor Statistics

Ten-year Treasury and 10-year Swaps Percent

Source: Federal Reserve Board

Commercial/Multifamily Mortgage Bankers Originations Index 2001 quarterly average = 100

Source: MBA

Commercial/Multifamily Delinquency Rates

Source: Federal Deposit Insurance Corporation

Commercial/Multifamily Property Sales $Billions

Source: Real Capital Analytics

Average Vacancy Rates By Property Type

Source: REIS

Price Indices December 2000 = 100

Source: MBA, Moody’s Investors Services and MIT

The Commercial Real Estate/ Multifamily

Finance Quarterly Data Book is a quarterly

compendium of the latest MBA research on the

commercial/multifamily finance markets. The

latest version of the Data Book can be downloaded from the MBA website

at: http://www.

mortgagebankers.org/ResearchandForecasts/

MBA Commercial Real Estate/ Multifamily Finance Quarterly Data Book First Quarter 2011 June 30, 2011 SELECTED CHARTS ................................................................................................ 5 TABLE OF CONTENTS ............................................................................................. 7 1. OUTLOOK

Introduction ....................................................................................................... 9 Economic Commentary ....................................................................................... 12 MBA Long-Term Mortgage Finance and Economic Forecasts ...................................... 15 Treasury Yields and Bank Rates ........................................................................... 17 Employees on Non-farm Payrolls .......................................................................... 19 Owner- and Renter-Occupied Housing Units ........................................................... 21

2. COMMERCIAL/MULTIFAMILY FINANCE ENVIRONMENT

Extract of Commercial Real Estate Comments from The Federal Reserve Board’s Beige Book........................................................... 23 New Inventory Change Less Net Absorption for Commercial/Multifamily Properties ................................................................... 26 Average Rents and Vacancy Rates at Commercial/Multifamily Properties .................... 28 Commercial/Multifamily Property Sales Volume ...................................................... 30 Commercial/Multifamily Prices and Capitalization Rates ........................................... 32 Commercial/Multifamily Property Price Indices ....................................................... 34 CoreLogic Profile of Commercial/Multifamily Properties By CBSA & Sales .................... 36 Multifamily Building Permits, Starts and Completions ............................................... 38

3. PRODUCTION

Quarterly Mortgage Banker Originations Survey ..................................................... 41 Commercial Mortgage Backed Securities (CMBS) and Commercial Real Estate Collateralized Debt Obligation (CRE CDO) Issuance ............................ 45 American Council of Life Insurers (ACLI) Commitment Volumes ................................ 47

4. COMMERCIAL MORTGAGE DEBT & REAL ESTATE SECURITIES OUTSTANDING

Commercial/Multifamily Mortgage Debt Outstanding ............................................... 49 Commercial/Multifamily Mortgage Delinquencies by Investor Group ........................... 66 Commercial Mortgage-Backed Securities (CMBS) Outstanding .................................. 72 Commercial Mortgage Backed Securities (CMBS) Spreads ........................................ 75

5. SERVICING

Commercial/Multifamily Mortgage Servicers, Year-End 2010 ..................................... 77

6. RECENT MBA COMMERCIAL/MULTIFAMILY RESEARCH RELEASES .................... 94

Commercial Real Estate/Multifamily Finance

Quarterly Data Book Q1 2011

RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOKOUTLOOK

1. Outlook Commercial Real Estate Markets Show the Natural Effects of the Turn of the Real Estate Cycle First quarter data on the commercial real estate markets show the natural effects of the turn of the real estate cycle. Broader economic indicators were grudgingly positive in the first quarter, but provided less of a tail wind to commercial real estate markets than they might have. Despite this softness, real estate fundamentals have stabilized and are beginning to show signs of mending. Transaction volumes are picking up, and pricing and loan performance are showing initial signs – inconsistent though they are – of improvement. Any pick-up in economic growth will speed the healing; any slow-down will draw out the cycle. THE ECONOMY The U.S. economy grew at a revised seasonally adjusted annual rate of 1.9 percent in the first quarter – the seventh straight quarter of positive growth but at a rate lower than what most economists see as necessary to keep the economy fully engaged. Investment in real estate structures, both residential and nonresidential, continued to be a drag on GDP growth. This and an overall decline in government spending and investment were the major factors behind the slower growth. Personal consumption, business spending and changes in inventories were all net positive contributors to growth during the quarter. Employment growth picked up in the first quarter and into the second before logging a disappointing report for May. On a seasonally-adjusted basis, monthly job growth was reported as 68,000 jobs in January, 235,000 jobs in February, 194,000 jobs in March and 232,000 jobs in April before falling to 54,000 jobs in May. The 9.1 percent unemployment rate, down from its 10.1 percent peak in October 2009, remains elevated.

The homeownership rate continued to decline during the first quarter – falling to a seasonally adjusted rate of 66.5 percent, the first time the rate has been below 2/3 since 1998. Coupled with a drop in the total number of occupied housing units, the homeownership rate decline drove the number of owner-occupied housing units down by more than 300,000 households during the quarter, while the number of renter-occupied units remained essentially flat. Since the end of 2006, demand for owner-occupied housing has declined by 1.5 million and demand for renter-occupied housing has increased by more than 3 million households. Interest rates remain extremely low on a historical basis. Short-term rates could scarcely get lower – with the 3-month Treasury at 0.04 percent in May and the 1-year Treasury at 0.19 percent – the lowest recorded since the series was started in 1953. The ten-year Treasury averaged 3.17 percent in May. COMMERCIAL REAL ESTATE FUNDAMENTALS Demand for space in commercial real estate properties, fostered by overall economic growth, is outpacing the low level of new space coming online, and is beginning to eat into commercial real estate vacancies. Average vacancy rates declined for apartment and office properties in the first quarter and were flat for retail properties. The drop in average apartment vacancy rates – driven by the continued drop in the homeownership rate – was the most pronounced, falling from 8.0 in the first quarter of 2010 and 6.6 percent in the fourth quarter of 2010 to 6.2 percent in the first quarter of 2011. Office vacancy rates fell from 17.6 percent in the fourth quarter to 17.5 percent in the first, but are up from




last year’s Q1 rate of 17.3 percent. Retail vacancy rates were flat at 10.9 percent in the first quarter, where they have been for the past year. Average asking rents for apartments rose two percent from last year’s first quarter while rents for office and retail space were unchanged. The strength of the apartment market has brought a bounce to multifamily construction starts and permitting. Multifamily starts rose, at a seasonally adjusted annual rate, to 134,000 units in May. The May level remains well below long-term averages but marked the fifth straight month above 100,000 units. Permitting has also shown the turn of the real estate cycle, with multifamily permitting in May (at a seasonally adjusted annual rate) rising to 190,000 units authorized – the highest monthly figure since October 2008, but also still well below long-term norms. PROPERTY SALES AND PRICING Property sales volumes followed the usual seasonal pattern – declining between the fourth quarter and first quarter – but were 70 percent higher than the level sold in the first quarter of 2010. A total of $24.6 billion of apartments, industrial, office and retail properties and portfolios of $5 million or more sold during the first quarter. Sales of apartment, industrial and office properties all more than doubled on a dollar basis from last year’s first quarter. Sales of retail properties rose 60 percent. Data on commercial real estate prices remain a riddle. After rising in the fourth quarter of 2010, both the Moody’s/REAL CPPI and NCREIF TBI fell during the first quarter, the Moody’s index by 8.5 percent and the NCREIF by 0.7 percent. The Moody’s index ended the quarter at just 53 percent of its peak value, the NCREIF index at 72 percent of its peak. Differences in the parts of the market each index covers explain some of the differences between the trends, but small transaction volumes, composition issues and other factors add a

cloud of uncertainty to interpreting the numbers. Reported cap rates, meanwhile, are down significantly. On a year-over-year basis, first quarter cap rates fell for all major property groups. Average cap rates for apartment properties fell from 6.9 percent in Q1 2010 to 6.7 percent in Q1 2011. Cap rates fell from 8.7 percent to 7.7 percent for industrial properties, 8.2 percent to 7.3 percent for office properties, and 8.2 percent to 7.6 percent for retail properties. MORTGAGE ORIGINATIONS AND DEBT OUTSTANDING Like property sales volumes, commercial and multifamily mortgage originations followed the usual seasonal pattern of declining between the fourth quarter and first quarter. First quarter 2011 originations were 25 percent lower than during the fourth quarter of 2010 and 89 percent higher than during the same period last year. Every major investor group saw an increase in activity compared to last year’s first quarter. Life companies made $7.8 billion of mortgage commitments during the first quarter, the highest first quarter level since 2008 and 60 percent more than during last year’s first quarter. CMBS securitizers issued $11.6 billion of new bonds, the highest first quarter level since 2007. No new CMBS were issued during the first quarters of either 2009 or 2010. The volume of new lending during the first quarter roughly equaled the volume of loans paying off and paying down, leading to little change in the amount of commercial/multifamily mortgage debt outstanding. The $2.377 trillion of mortgage debt outstanding at the end of the first quarter was $3 billion, or 0.1 percent, lower than the level at the end of the fourth quarter. Of the top seven investor groups, five – CMBS, CDO and other ABS issues; Agency and GSE portfolios and MBS; life insurance companies; state and local governments; and the federal government – increased their holdings of commercial and multifamily mortgages over the quarter. Banks and




thrifts and finance companies each reduced their balances. The balance of multifamily mortgage debt outstanding increased by $3 billion or 0.4 percent over the quarter, driven by continued increases in the balances held and insured by Agency and GSE portfolios and MBS (predominantly Fannie Mae, Freddie Mac and FHA). MORTGAGE PERFORMANCE The turn of the real estate cycle is showing itself in commercial and multifamily delinquency rates as well. Delinquency rate experiences continued to be mixed among different investor groups during quarter. The delinquency rate for loans held in CMBS reached the highest level since the series began in 1997, but the climb was slower than in recent quarters. Delinquency rates for other groups remain below levels seen in the last major real estate downturn during the early 1990’s, some by large margins. Between the fourth quarter of 2010 and first quarter of 2011, the 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained the same at 4.18 percent, 2.40 percentage points lower than the series high (6.58 percent reached in the second quarter of 1991) . The 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) increased 0.23 percentage points to 9.18 percent, a record high for the series. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.05 percentage points to 0.14 percent, 7.23 percentage points lower than the series high (7.37 percent reached during the fourth quarter of 1993). The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae decreased 0.07 percentage points to 0.64 percent, 2.98 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.10 percentage points to 0.36 percent, 6.45 percentage points lower than the series high (6.81 percent reached in 1992).

CONCLUSION For most property types, vacancy rates remain elevated, transaction volumes remain muted and property prices remain below their peaks, but the natural ebb and flow of the real estate cycle is beginning to have an effect. Economic growth, coupled with the natural cycle response of a constriction in new supply in the wake of a real estate downturn, is helping to stabilize and mend the commercial real estate markets. The pace and shape of continued recovery will be driven by the rate of economic growth and by how investors and developers react to the market changes they see and foresee.




Economic Commentary Waiting, waiting… June 15, 2011 The US economic recovery has been unusually dependent upon steady growth in the rest of the world to fuel demand for US exports. With continued turmoil in the Mideast, a renewed debt crisis in Europe, Japan recovering from the tsunami, and fears of a bubble in the Chinese economy, world economic growth has slowed. These global disruptions have added to the pervasive sense in the US that the domestic economy is still treading water, with businesses and households reluctant buyers across the board. Job growth has been disappointing in recent months, but job growth is better than the alternative. Manufacturing activity, which in prior months was one of the strongest sectors of the economy, seems to have stalled. With the disappointing economic data, interest rates have continued to slide over the past month, dipping below the 3 percent mark in recent weeks. To cap off this unhappy report, inflation has picked up in recent months, and price pressures seem to be spreading beyond prices for gas and food. However, bond markets seem to have taken little notice of this uptick so far. Markets also seem surprisingly unfazed by the pending deadline regarding the federal debt limit. For mortgage originators, this has meant a pleasant surprise in the form of a significant increase in refinance volume as mortgage rates have dropped 8 of the last 9 weeks. Our forecast projects a pickup in economic growth and job growth in the second half of the year and that interest rates will trend upwards this year and next, as the Fed exits the market. Our expectation is that the Fed will not increase their short-term rate target until early in 2012. However, the risk that the economy will continue to grow at a below trend pace has increased. If that

happens, rates could stay lower for a longer time, but it would also coincide with slower job growth, and an even longer timeline for housing market recovery. Growth Has Been Slow In the First Half of 2011 The second estimate of Q1 GDP released indicated that growth in Q1 was at an annual rate of 1.8 percent. This was the same estimate as the advance report, although there were revisions to the relative contributions to growth by the various components that make up GDP. There were upward revisions to exports, private inventory investment, and business fixed investment, but these were offset by a significant downward revision to person al consumption expenditures and an upward revision to imports, which contributes negatively to growth. The 1.8 percent growth rate in Q1 was driven by the same main categories: PCE (+2.2 percent), private inventory investment (+$52.2B), exports (+9.2 percent), and business fixed investment (+ 3.4 percent). Drags to growth were federal government spending and state and local government spending. Imports increased 7.5 percent. The ISM’s Manufacturing Index decreased to 53.5 in April from 60.4 in March, the largest single month decrease since January 1984 and the lowest level of the index September 2009, a sign that even though manufacturing continues to expand, the rate of growth has slowed dramatically. The index had reached a seven year high in February, but has now decreased in each of the last three months. The component indexes for new orders, production, and employment all decreased as well, but all




remain above 50, which indicate that there is growth yet in those categories. The inventories index decreased to below 50 for the third time in four months. The ISM’s Nonmanufacturing Index increased slightly in April to 54.6 from 52.8 in March. This indicated overall sector growth, but still at a relatively slow pace. The business activity/production component was slightly lower, but new orders and employment saw increases. The factory orders report for April showed a decrease in total new orders of 1.2 percent from March. Excluding the volatile transportation component, new orders were down 0.2 percent. The transportation component, on its own, saw a 9.3 percent decrease from the previous month. Other notable changes in April were durable goods orders, which declined 3.6 percent, the machinery component, for which orders decreased 2.8 percent, and computers and electronic products, which saw a 1.4 percent increase. Shipments of nondefense capital goods, excluding aircraft, decreased 1.5 percent in April, and new orders for nondefense capital goods, excluding aircraft, decreased 2.3 percent from the previous month. Both of these indicators indicate potentially weaker business investment expenditures for the Q2 GDP estimates. Inventories grew for manufacturing industries as a whole, increasing 1.3 percent from the previous month, driven by a 5.7 percent increase in computers and a 2.0 percent increase in consumer goods. The Consumer Price Index (CPI) for All Urban Consumers increased by 0.2 percent in May on a seasonally adjusted basis. It was the smallest monthly increase in the index since November 2010 but is still the 16th straight month with a positive increase. The all items CPI has increased by 3.6 percent over the past year, on an unadjusted basis. Notably, the core CPI, which is all items less food and energy, increased 0.3 percent, the largest monthly increase since May 2006. This was driven by increases in the indexes

for apparel and new and used motor vehicles. The energy index decreased by 1.0 percent and the gasoline index decreased by 2.0 percent. The increase in the gasoline index broke the trend of 10 cycles of positive monthly increases. The energy index was still 20.7 percent higher than where it was a year ago. The housing index increased by 0.20 percent, driven largely by a 1.9 percent increase in lodging away from home. Industrial production in the US was slightly lower in May compared to April. Increases in manufacturing and mining were balanced by a decrease in utilities output. Capacity utilization was unchanged in May at 76.7 percent, and remains below longer term historical averages. We expect GDP growth in the second half will pick up from the 1.8 percent pace in the first quarter, averaging about 2.8 percent for the year. Growth will be around the same pace in 2012 due to the expiration of the FICA holiday, as both business fixed investment and PCE pull back slightly, as these are offset by higher residential fixed investment and a smaller trade deficit. Job growth will be in the region of 150,000 jobs per month for the next 12 months, and we expect the unemployment rate to end 2011 at 8.7 percent before decreasing to around 7.8 percent by the end of 2012. Disappointing job market data Total nonfarm payrolls increased by 54,000 jobs in May, with private payrolls increasing by 83,000 and government payrolls decreasing by 29,000. Most of the growth in employment for May came from private service-providing industries, with professional and business services and education and health services seeing the most significant increases, 44,000 jobs and 34,000 jobs, respectively. The total increase in payrolls was the smallest since outright declines in September 2010. In addition, the previous two months’ payroll numbers were revised downwards by a total of 39,000 jobs.




The unemployment rate increased to 9.1 percent from 9.0 percent in May, with the labor force participation rate remaining unchanged at 64.2 percent for the fifth consecutive month. The number of new entrants decreased by 115,000 to 1.2 million workers and the number of reentrants increased by 58,000 to 3.4 million workers. The number of workers who were long-term unemployed was 6.2 million, an increase of 361,000, and this share increased to 45.1 percent from 43.4 percent previously. The number of discouraged workers fell to 822,000, down 167,000 from the previous month and down 261,000 from the previous year. The number of discouraged workers is the lowest since October 2009. The U6 measure of labor underutilization decreased to 15.8 percent from 15.9 percent in April. However, the payroll numbers are not as bad as they first appear. On a non-seasonally adjusted basis, private sector payrolls actually increased by 723,000 in May. Looking at the jobs numbers is on a year over year basis, the non-seasonally adjusted increase for May when compared to May 2010 was the largest increase for May since May 2007. Similarly, the April increase was the largest April increase since April 2005, the March increase was the largest since March 2006 and the February increase was the largest since February 2006.




TREASURY YIELDS AND BANK RATES

Federal Reserve Statistical Release H-15

Treasury Yield Curve

6.0

3.0

4.0

5.0

6.0

-

1.0

2.0

3.0

4.0

5.0

6.0

10-Year7-Year5-Year3-Year1-Year3-Month

May 11 Dec 10 Dec 09 Dec 08 Dec 07 Dec 06

Ten Year Treasury and Ten Year Swaps

-

1.0

2.0

3.0

4.0

5.0

6.0


May-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06

6 0

7.0

8.0

-

1.0

2.0

3.0

4.0

5.0

6.0



1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Source: Federal Reserve Board H-15 Report

-

1.0

2.0

3.0

4.0

5.0

6.0



-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Jul-0

0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

10-Year Treasury 10 Year Swaps

pYields on actively traded issues adjusted to constant maturities.




TREASURY YIELDS AND BANK RATES

Federal Reserve Statistical Release H-15

3-Month 1-Year 3-Year 5-Year 7-Year 10-Year 10-YearTreasury Treasury Treasury Treasury Treasury Treasury SwapTreasury Treasury Treasury Treasury Treasury Treasury Swap

Dec-00 5.94 5.60 5.26 5.17 5.28 5.24 6.27 Dec-01 1.72 2.22 3.62 4.39 4.86 5.09 5.82 Dec-02 1.21 1.45 2.23 3.03 3.63 4.03 4.48 Dec-03 0.91 1.31 2.44 3.27 3.79 4.27 4.65 Dec-04 2.22 2.67 3.21 3.60 3.93 4.23 4.63 Dec-05 3.97 4.35 4.39 4.39 4.41 4.47 5.01 Dec 05 3.97 4.35 4.39 4.39 4.41 4.47 5.01 Dec-06 4.97 4.94 4.58 4.53 4.54 4.56 5.03 Dec-07 3.07 3.26 3.13 3.49 3.74 4.10 4.76 Dec-08 0.03 0.49 1.07 1.52 1.89 2.42 2.70 Dec-09 0.05 0.37 1.38 2.34 3.07 3.59 3.71 Dec-10 0.14 0.29 0.99 1.93 2.66 3.29 3.39

May-10 0.16 0.37 1.32 2.18 2.86 3.42 3.46 J 10 0 12 0 32 1 17 2 00 2 66 3 20 3 27Jun-10 0.12 0.32 1.17 2.00 2.66 3.20 3.27 Jul-10 0.16 0.29 0.98 1.76 2.43 3.01 3.01 Aug-10 0.16 0.26 0.78 1.47 2.10 2.70 2.69 Sep-10 0.15 0.26 0.74 1.41 2.05 2.65 2.65 Oct-10 0.13 0.23 0.57 1.18 1.85 2.54 2.58 Nov-10 0.14 0.25 0.67 1.35 2.02 2.76 2.87 Dec-10 0.14 0.29 0.99 1.93 2.66 3.29 3.39 Jan-11 0.15 0.27 1.03 1.99 2.72 3.39 3.45Jan 11 0.15 0.27 1.03 1.99 2.72 3.39 3.45 Feb-11 0.13 0.29 1.28 2.26 2.96 3.58 3.67 Mar-11 0.10 0.26 1.17 2.11 2.80 3.41 3.52 Apr-11 0.06 0.25 1.21 2.17 2.84 3.46 3.52 May-11 0.04 0.19 0.94 1.84 2.51 3.17 3.25

Change in Rate May-10 t M

(0.12) (0.18) (0.38) (0.34) (0.35) (0.25) (0.21)

Source: Federal Reserve Board H-15 ReportYields on actively traded issues adjusted to constant maturities.

10 to May-11




EMPLOYEES ON NONFARM PAYROLLS

Number of Employees on Nonfarm PayrollsSeasonally Adjusted, Thousands of Employees

Year-over-year Change

-

2,000

4,000

6,000

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1

Month-over-month Change

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Total Non-Farm Service Producing Goods Producing

600

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


(400)

(200)

-

200

400

600

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


(1,000)

(800)

(600)

(400)

(200)

-

200

400

600

990

991

992

993

994

995

996

997

998

999

000

001

002

003

004

005

006

007

008

009

010

011


(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011


(1,000)

(800)

(600)

(400)

(200)

-

200

400

600

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Service Producing Goods Producing




EMPLOYEES ON NONFARM PAYROLLS

Number of Employees on Nonfarm PayrollsSeasonally Adjusted, Thousands of Employees

ChangeService Goods Total Service Goods Total

EmployeesService Goods Total Service Goods Total

Producing Producing Nonfarm Producing Producing Nonfarm

Dec 2000 107,913 24,572 132,485 1,960 (7) 1,953 Dec 2001 107,630 23,093 130,723 (283) (1,479) (1,762) Dec 2002 107,996 22,187 130,183 366 (906) (540) Dec 2003 108,567 21,703 130,270 571 (484) 87

Year-over-year

Dec 2003 108,567 21,703 130,270 571 (484) 87 Dec 2004 110,314 22,003 132,317 1,747 300 2,047 Dec 2005 112,441 22,372 134,813 2,127 369 2,496 Dec 2006 114,491 22,400 136,891 2,050 28 2,078 Dec 2007 116,016 21,967 137,983 1,525 (433) 1,092 Dec 2008 114,071 20,312 134,383 (1,945) (1,655) (3,600) Dec 2009 111,555 17,765 129,320 (2,516) (2,547) (5,063) Dec 2010 112,463 17,797 130,260 908 32 940

May 2010 112,410 17,763 130,173 457 1 458 Jun 2010 112,218 17,763 129,981 (192) - (192) Jul 2010 112,141 17,791 129,932 (77) 28 (49) Aug 2010 112,083 17,790 129,873 (58) (1) (59) Sep 2010 112,060 17,784 129,844 (23) (6) (29) Oct 2010 112 230 17 785 130 015 170 1 171

Month-over-month

Oct 2010 112,230 17,785 130,015 170 1 171 Nov 2010 112,315 17,793 130,108 85 8 93 Dec 2010 112,463 17,797 130,260 148 4 152 Jan 2011 112,493 17,835 130,328 30 38 68 Feb 2011 112,647 17,916 130,563 154 81 235 Mar 2011 112,801 17,956 130,757 154 40 194 Apr 2011 112,995 17,994 130,989 194 38 232 May 2011 113,046 17,997 131,043 51 3 54 y

Percent change

May 2010 to May 2011 0.6% 1.3% 0.7%





Change in Owner- and Renter-OccupiedHousing Units

Thousands of Units


2,500

1,000

1,500

2,000

2,500

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

Quarter-over-quarter Change

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

1990 1995 2000 2005 2010

Change in Renter-occupied Units Change in Owner-occupied Units

Quarter over quarter Change

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

1990 1995 2000 2005 2010


400

600

800

1,000

1,200

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

1990 1995 2000 2005 2010


(800)

(600)

(400)

(200)

-

200

400

600

800

1,000

1,200

Source: MBA, U.S. Census Bureau and Haver Analytics

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

1990 1995 2000 2005 2010


(1,000)

(800)

(600)

(400)

(200)

-

200

400

600

800

1,000

1,200

1990 1995 2000 2005 2010





Owner- and Renter-Occupied Housing Units

Thousands of Units at End-of-period

T t l O R t T t l O R tYear-over-year ChangeNumber of Occupied Units

Total Owner Renter Total Owner Renter

1990 91,728 58,798 32,930 750 754 (4) 1991 92,691 59,508 33,183 963 710 253 1992 93,980 60,523 33,457 1,289 1,015 274 1993 95,717 61,450 34,267 1,737 927 810 1994 96,797 62,144 34,653 1,080 693 387 1995 97,545 63,502 34,043 748 1,358 (610)1995 97,545 63,502 34,043 748 1,358 (610) 1996 98,421 64,367 34,054 876 866 10 1997 99,743 65,531 34,212 1,322 1,164 158 1998 101,115 67,140 33,975 1,372 1,609 (237) 1999 102,330 68,459 33,871 1,215 1,318 (103) 2000 103,576 69,914 33,662 1,246 1,455 (209) 2001 104,508 71,065 33,443 932 1,152 (220) 2002 105,446 72,020 33,426 938 954 (16) 2003 106,069 72,763 33,306 623 744 (121) 2004 108,166 74,851 33,315 2,097 2,088 9 2005 109,487 75,546 33,941 1,321 695 626 2006 110,270 75,976 34,294 783 430 353 2007 110,766 75,099 35,667 496 (877) 1,373 2008 110,740 74,750 35,991 (26) (350) 324 2009 111,370 74,841 36,529 630 91 539 2010 112 451 74 780 37 671 1 081 (61) 1 1422010 112,451 74,780 37,671 1,081 (61) 1,142

2008 - Q1 110,340 74,811 35,529 (426) (289) (137) 2008 - Q2 110,584 75,308 35,276 244 497 (253) 2008 - Q3 110,887 75,292 35,595 303 (15) 318 2008 - Q4 110,740 74,750 35,991 (147) (543) 396 2009 - Q1 110,746 74,532 36,214 6 (217) 223

Quarter-over-quarter Change

2009 Q1 110,746 74,532 36,214 6 (217) 223 2009 - Q2 111,299 75,016 36,283 553 483 70 2009 - Q3 111,222 75,186 36,036 (77) 171 (248) 2009 - Q4 111,370 74,841 36,529 148 (345) 493 2010 - Q1 111,406 74,753 36,653 36 (87) 123 2010 - Q2 111,667 74,705 36,962 261 (48) 309 2010 - Q3 111,914 74,870 37,044 247 165 82 2010 - Q4 112,451 74,780 37,671 537 (91) 628 2011 - Q1 112,164 74,477 37,687 (287) (303) 16

Source: MBA, U.S. Census Bureau and Haver Analytics



RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOK ENVIRONMENT

2. Commercial/Multifamily Finance Environment Extract of Commercial Real Estate Comments from the Federal Reserve Board’s Beige Book June 8, 2011 Prepared at the Federal Reserve Bank of New York and based on information collected on or before May 27, 2011. This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials. NATIONAL SUMMARY Commercial and industrial real estate markets have generally been steady since the last report, though there have been scattered signs of a pickup. Commercial leasing markets showed modest signs of improvement in the Richmond and San Francisco Districts. Boston and Dallas noted some firming in property sales markets, but Kansas City reported declines in prices for office buildings. Non-residential construction, though widely reported to be at very low levels, rose modestly in the Boston, Chicago, Minneapolis, and Dallas Districts, though Chicago noted that public sector projects are becoming smaller. Cleveland observed a pickup in industrial and high-end commercial development but a pullback in healthcare-related projects. Richmond reported some pockets of strength in the retail market. More broadly, contacts in a number of Districts expressed a general sense of optimism about the outlook for the second half of 2011. Boston reported some easing in commercial real estate lending, but New York reported tighter standards in that segment. Credit standards on home mortgage loans tightened somewhat in the St. Louis District. A number of Districts noted improvements in overall credit quality: specifically, Philadelphia, Cleveland, Richmond, Kansas City, Dallas, and San Francisco. New York indicated rising

delinquency rates on consumer loans but declining rates on commercial loans and mortgages. FIRST DISTRICT—BOSTON Across the region, contacts report that commercial leasing activity remains modest, especially in the office sector where job growth has been tepid. The Hartford office market shows very light leasing activity and negligible absorption. In Providence, office leasing volume was also very light, but rents are said to be firming up. Office leasing activity in Boston is described as slow-to-moderate, and some say recent activity is slower than in the first quarter. Boston deals consist largely of tenant renewals, resulting in little net absorption. The biotechnology and pharmaceuticals sector in Boston is seen as comparatively dynamic, generating strong demand for office space in Cambridge and planned new construction in Boston's waterfront area. In Portland, activity is flat for the most part, although at least one significant office leasing deal was signed. Investor interest in apartments remains strong in Boston, with some contacts expressing concern that sales prices are getting too high; interest in prime office properties also strengthened in Boston. The lending environment for commercial real estate is described as increasingly favorable to borrowers. The outlook among contacts is cautiously optimistic. All expect at least slow growth in office and retail demand for the remainder of 2011 and some see potential for significant improvement in market conditions by early 2012, although a few mention risks posed by fiscal conditions and related political uncertainty at both the state and national levels. SECOND DISTRICT—NEW YORK




Commercial real estate markets have been largely steady since the last report. Office markets showed signs of modest improvement in New York City, Long Island, and most of upstate New York, as vacancy rates edged down while asking rents were steady to up slightly. However, market conditions weakened somewhat in northern New Jersey, Westchester and Fairfield Counties, and in the Albany area. Industrial vacancy rates rose in Long Island but were little changed in other markets. In much of the District, asking rents on industrial properties, which had been declining through the end of 2010, have leveled off or moved up modestly in recent months. THIRD DISTRICT—PHILADELPHIA Commercial and industrial market conditions in the Third District have shown little change since the previous Beige Book, according to area nonresidential real estate contacts, although some noted that office vacancy rates have edged down slightly in some areas. Rents have been steady in most areas, and concessions remain common. Contacts in commercial real estate reported that demand for space in Class A office buildings has strengthened relative to Class B space as local companies relocate upon lease expirations. "Companies are trading up for higher quality," one contact said. This trend is expected to continue for the rest of this year, and any reduction in vacancy rates for less desirable buildings is expected to lag the modest decline in Class A vacancy rates that commercial real estate agents forecast for the balance of 2011. Industrial rents have been flat, but some contacts expect them to rise toward the end of the year as demand for space grows in the absence of new supply. FOURTH DISTRICT—CLEVELAND Information on nonresidential construction varied widely. However, one aspect our contacts agreed on was a moderate improvement in inquiries. Activity is being driven by industrial projects and high-end projects (greater than $100 million) that are now in the construction phase, after several years of planning. We heard reports of a pullback in healthcare-related work. A

majority of our contacts expect that activity will slowly improve as the year progresses. Financing is more readily available if developers are willing to increase their equity share. We heard reports of increased prices for building materials, particularly for steel. One contact noted that materials suppliers are holding back price increases due to a lack of demand. Contractors are absorbing rising materials prices in their margins. General contractors held payrolls steady, and they expect little, if any, new permanent hiring in the upcoming months. FIFTH DISTRICT—RICHMOND Commercial real estate activity was mixed across market segments and geographic areas of the District over the last month. Pockets of modest strength were noted in demand for retail space in the Hampton Roads area, as gains in retail sales in recent months bolstered retailers' confidence, according to a local Realtor. A West Virginia Realtor reported that the leasing of office space had picked up, but both retail and industrial demand remained stagnant. However, the demand for office space in Baltimore was described as "spotty at best" by one Realtor. A central Virginia Realtor noted improved commercial leasing activity and modest gains in demand for the retail space, but leasing of industrial space was unchanged over the last month. A North Carolina Realtor reported modest, but widespread improvements in leasing, while several contacts in the D.C. area cited mostly softer leasing activity over the last few weeks. Contacts generally characterized rents as having stabilized, and several Realtors stated that banks were more willing to lend than earlier in the year. A Maryland contact in commercial construction stated that area contractors were unable to increase prices due to weak demand, but subcontractors were having more success at passing though increases in commodity costs. SIXTH DISTRICT—ATLANTA Nonresidential construction activity remained at low levels during April and May. Commercial brokers indicated that most markets continued to stabilize, but the pace




of activity remained slow. Growing demand for apartments spurred an increase in multifamily development in several parts of the region. Overall, commercial construction activity is expected to remain at low levels for the rest of the year. SEVENTH DISTRICT—CHICAGO Nonresidential construction edged up with stronger demand from the automotive industry, small retail projects, and renovation. Contacts indicated that while more private sector building projects are coming up for bid, stiff competition continues to put downward pressure on pricing. Furthermore, while public sector projects remain a source of strength, they are becoming smaller. Commercial real estate conditions were little changed, with vacancy rates steady and landlords keeping commercial rents low to maintain occupancy at existing levels. EIGHTH DISTRICT—ST. LOUIS Commercial and industrial real estate market conditions were mixed. Compared with the fourth quarter of 2010, first quarter 2011 suburban office vacancy rates increased in St. Louis, decreased in Little Rock and Louisville, and remained constant in Memphis. The downtown office vacancy rates increased in Louisville and St. Louis, decreased in Memphis, and stayed the same in Little Rock. Industrial vacancy rates decreased for Louisville, Memphis, and St. Louis but increased for Little Rock. Commercial and industrial construction activity remained slow throughout most of the District. Contacts in Little Rock noted that commercial construction has remained fairly weak. Contacts in St. Louis and northwest Arkansas also noted weak commercial construction activity. In contrast, some contacts in southwestern Illinois and Kentucky noted that overall construction has increased recently. NINTH DISTRICT—MINNEAPOLIS Commercial real estate markets were steady since the last report. According to industry analysts in the Minneapolis-St. Paul area, office vacancy rates declined slightly, retail vacancy was flat and industrial

vacancy rates did not change much. Home sales during mid-May in Minneapolis-St. Paul were down from last year's tax-credit-driven sales, while new listings increased. April home sales in Billings, Mont., also decreased from last year's tax-credit-driven sales, while the number of homes available for sale increased. Meanwhile, the number of homes for sale in both Sioux Falls and Fargo was down from a year ago. The inventory of homes held by lenders in Minneapolis also increased. Multifamily housing vacancy rates declined, and rents increased over the past few months. TENTH DISTRICT—KANSAS CITY Commercial real estate activity was mostly flat, though it was slightly stronger than a year ago and contacts had a more positive outlook for future months. Vacancy and absorption rates were steady but expected to improve. Office prices and rents declined and were below year-ago levels in most cities. One contact noted continued obstacles in financing, and another firm said projects have decreased in overall size. ELEVENTH DISTRICT—DALLAS Private nonresidential demand has improved. Leasing activity is growing and there are reports that industrial and office construction are increasing from very low levels. Sales of commercial buildings are also picking up across the District. TWELFTH DISTRICT—SAN FRANCISCO By contrast, conditions continued to be stronger in apartment markets, particularly in the Seattle area: rental rates there reportedly are growing at an annual rate of 10 to 15 percent, spurring significant increases in construction activity. Vacancy rates for office and industrial space stayed elevated throughout the District, but further improvements in demand were noted for several major markets. This was particularly the case in the San Francisco Bay Area and Seattle, with revived developer interest in new construction reported for the latter area.




NET INVENTORY CHANGE/NET ABSORPTIONCOMMERCIAL/MULTIFAMILY PROPERTIES

Net Absorption (Thousands of Square Feet)

Net Inventory Change (Thousands of Square Feet)

‐60,000

‐40,000

‐20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

Office Retail Apartment

80 000

100,000

120,000

Source: REIS

‐60,000

‐40,000

‐20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1


‐60,000

‐40,000

‐20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1





COMMERCIAL/MULTIFAMILY PROPERTIESNET INVENTORY CHANGE LESS NET ABSORPTION

THOUSANDS OF SQUARE FEET

CalendarYear Q1 Q2 Q3 Q4 Year YTD Q1

APARTMENT2002 76,548 22,956 9,103 39,600 148,207 76,548 2003 54,550 (7,448) (10,389) 27,848 64,561 54,550 2004 27,208 (24,225) (20,491) 3,117 (14,391) 27,208 2005 (6,211) (20,042) (57,353) (12,008) (95,614) (6,211) 2006 11,077 (23,847) (13,888) 38,500 11,842 11,077 2007 19,312 (19,349) (14,676) 9,846 (4,867) 19,312 2008 24,527 15,689 9,280 50,094 99,590 24,527 2009 64,826 35,241 17,800 20,380 138,247 64,826 2010 1,463 (17,848) (71,586) (46,527) (134,498) 1,463 2011 (39,371) (39,371)

OFFICE2002 42,606 23,707 17,453 15,574 99,340 42,606 2003 13,626 11,394 8,539 8,093 41,652 13,626 2004 (201) (1,996) (5,895) (12,298) (20,390) (201) 2005 (11,483) (21,652) (15,582) (16,844) (65,561) (11,483) 2006 (19,558) (13,917) (13,385) (5,583) (52,443) (19,558) 2007 (9,958) (11,669) (9,309) 5,429 (25,507) (9,958) 2008 11,294 13,986 24,087 31,406 80,773 11,294 2009 30,429 32,271 24,955 17,637 105,292 30,429 2010 14,660 4,939 7,733 (764) 26,568 14,660 2011 (1,751) (1,751)

RETAIL2002 4,956 (717) 438 123 4,800 4,956 2003 (1,337) 234 2,434 (512) 819 (1,337) 2004 1,007 (1,368) (1,383) (205) (1,949) 1,007 2005 102 (3,892) 1,390 1,448 (952) 102 2006 2,549 43 2,660 2,267 7,519 2,549 2007 1,486 2,644 1,564 3,825 9,519 1,486 2008 5,331 9,094 6,474 10,395 31,294 5,331 2009 11,788 11,282 6,042 5,565 34,677 11,788 2010 3,462 2,579 1,194 279 7,514 3,462 2011 (663) (663)

Source: REIS




AVERAGE RENTS AND VACANCY RATES ATCOMMERCIAL/MULTIFAMILY PROPERTIES

Average Rents

$1,100$35$/Sq Ft $/Month

$850

$900

$950

$1,000

$1,050

$1,100

$10

$15

$20

$25

$30

$35$/Sq Ft $/Month

$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

$0

$5

$10

$15

$20

$25

$30

$35

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1

$/Sq Ft $/Month

Average Vacancy Rates percent

20

$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

$0

$5

$10

$15

$20

$25

$30

$35

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1

Office Retail Apartment (Right Scale)

$/Sq Ft $/Month

10

12

14

16

18

20

$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

$0

$5

$10

$15

$20

$25

$30

$35

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1


$/Sq Ft $/Month

0

2

4

6

8

10

12

14

16

18

20

Q1

Q3

Q1

Q3

Q1

Q3

5Q1

5Q3

Q1

Q3

Q1

Q3

8Q1

8Q3

9Q1

9Q3

Q1

Q3

Q1

$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

$0

$5

$10

$15

$20

$25

$30

$35

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1


$/Sq Ft $/Month

Source: REIS

0

2

4

6

8

10

12

14

16

18

20

2002

Q1

2002

Q3

2003

Q1

2003

Q3

2004

Q1

2004

Q3

2005

Q1

2005

Q3

2006

Q1

2006

Q3

2007

Q1

2007

Q3

2008

Q1

2008

Q3

2009

Q1

2009

Q3

2010

Q1

2010

Q3

2011

Q1


$750

$800

$850

$900

$950

$1,000

$1,050

$1,100

$0

$5

$10

$15

$20

$25

$30

$35

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1


$/Sq Ft $/Month




AVERAGE RENTS AND VACANCY RATES ATCOMMERCIAL/MULTIFAMILY PROPERTIES

Year Q1 Q2 Q3 Q4

Q1 Year-over-

year % change Q1 Q2 Q3 Q4

Q1 Year-over-year change

APARTMENT (per month)2002 876$ 880$ 886$ 889$ 5.6 5.8 5.9 6.3 2003 892$ 894$ 897$ 902$ 2% 6.8 6.7 6.6 6.9 1.22004 903$ 909$ 917$ 921$ 1% 7.2 6.9 6.7 6.7 0.42005 925$ 929$ 938$ 944$ 2% 6.6 6.4 5.8 5.7 -0.62006 951$ 962$ 974$ 982$ 3% 5.9 5.6 5.5 5.8 -0.72007 990$ 1,002$ 1,015$ 1,025$ 4% 6.0 5.8 5.7 5.7 0.12008 1,035$ 1,045$ 1,051$ 1,050$ 5% 6.0 6.1 6.2 6.7 0.02009 1,044$ 1,039$ 1,033$ 1,026$ 1% 7.4 7.7 7.9 8.0 1.42010 1,027$ 1,032$ 1,037$ 1,043$ -2% 8.0 7.8 7.1 6.6 0.62011 1,047$ 2% 6.2 -1.8

OFFICE 2002 25.55$ 25.20$ 24.95$ 24.76$ 14.7 15.3 15.7 16.0 2003 24.45$ 24.17$ 24.01$ 23.89$ -4% 16.3 16.6 16.8 17.0 1.62004 23.76$ 23.70$ 23.70$ 23.70$ -3% 17.0 16.9 16.7 16.4 0.72005 23.80$ 23.94$ 24.11$ 24.29$ 0% 16.1 15.5 15.1 14.7 -0.92006 24.64$ 25.02$ 25.47$ 26.00$ 4% 14.2 13.9 13.5 13.4 -1.92007 26 65$ 27 38$ 27 98$ 28 50$ 8% 13 1 12 8 12 5 12 6 -1 1

Average Asking Rents Average Vacancy Rates (percent)

(per sq. ft)

2007 26.65$ 27.38$ 27.98$ 28.50$ 8% 13.1 12.8 12.5 12.6 -1.12008 28.97$ 29.24$ 29.37$ 29.18$ 9% 12.9 13.2 13.8 14.5 -0.22009 28.78$ 28.39$ 28.11$ 27.79$ -1% 15.2 16.0 16.6 17.0 2.32010 27.57$ 27.53$ 27.50$ 27.53$ -4% 17.3 17.5 17.6 17.6 2.12011 27.66$ 0% 17.5 0.2

RETAIL2002 16.38$ 16.47$ 16.58$ 16.68$ 7.4 7.3 7.3 7.3 2003 16.76$ 16.86$ 16.98$ 17.14$ 2% 7.2 7.2 7.3 7.2 -0.22004 17.22$ 17.33$ 17.49$ 17.62$ 3% 7.2 7.1 7.0 7.0 0.02005 17.74$ 17.88$ 18.06$ 18.22$ 3% 7.0 6.7 6.8 6.8 -0.22006 18.35$ 18.50$ 18.73$ 18.92$ 3% 6.9 6.9 7.0 7.1 -0.12007 19.08$ 19.23$ 19.33$ 19.46$ 4% 7.2 7.3 7.3 7.5 0.32008 19.54$ 19.60$ 19.59$ 19.52$ 2% 7.7 8.1 8.4 8.9 0.52009 19.40$ 19.27$ 19.21$ 19.13$ -1% 9.5 10.0 10.3 10.6 1.82010 19.06$ 19.01$ 19.01$ 18.99$ -2% 10.8 10.9 10.9 10.9 1.32011 18.98$ 0% 10.9 0.1

Source: REIS

(per sq. ft)




QUARTERLY SALES OF LARGER ($5 MILLION+)COMMERCIAL/MULTIFAMILY PROPERTIES

Billions of dollars, Properties and portfolios $5 million and greater

$160

$100

$120

$140

$160

$40

$60

$80

$100

$120

$140

$160

$-

$20

$40

$60

$80

$100

$120

$140

$160

200

1 Q

12

001

Q2

200

1 Q

32

001

Q4

200

2 Q

12

002

Q2

200

2 Q

32

002

Q4

200

3 Q

12

003

Q2

200

3 Q

32

003

Q4

200

4 Q

12

004

Q2

200

4 Q

32

004

Q4

200

5 Q

12

005

Q2

200

5 Q

32

005

Q4

200

6 Q

12

006

Q2

200

6 Q

32

006

Q4

200

7 Q

12

007

Q2

200

7 Q

32

007

Q4

200

8 Q

12

008

Q2

200

8 Q

32

008

Q4

200

9 Q

12

009

Q2

200

9 Q

32

009

Q4

201

0 Q

12

010

Q2

201

0 Q

32

010

Q4

201

1 Q

1

Source: Real Capital Analytics.

$-

$20

$40

$60

$80

$100

$120

$140

$160

2001

Q1

2001

Q2

2001

Q3

2001

Q4

2002

Q1

2002

Q2

2002

Q3

2002

Q4

2003

Q1

2003

Q2

2003

Q3

2003

Q4

2004

Q1

2004

Q2

2004

Q3

2004

Q4

2005

Q1

2005

Q2

2005

Q3

2005

Q4

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

Apartment Retail Industrial Office




QUARTERLY SALES OF LARGER ($5 MILLION+)COMMERCIAL/MULTIFAMILY PROPERTIES

Billions of dollars, Properties and portfolios $5 million and greater

Year Q1 Q2 Q3 Q4 SalesPercent change Sales

Percent change

APARTMENT2006 26.39$ 18.21$ 19.98$ 27.76$ 92.34$ 7% 26.39$ 45%2007 21.42$ 19.84$ 22.91$ 35.84$ 100.01$ 8% 21.42$ -19%2008 13.44$ 9.46$ 10.19$ 5.06$ 38.14$ -62% 13.44$ -37%2009 2.29$ 3.33$ 3.71$ 5.40$ 14.74$ -61% 2.29$ -83%2010 4.80$ 5.39$ 9.27$ 12.30$ 31.76$ 116% 4.80$ 109%2011 7.14$ 7.14$ 49%

INDUSTRIAL2006 12.40$ 12.21$ 9.76$ 13.34$ 47.70$ 21% 12.40$ 75%2007 12.21$ 14.53$ 15.38$ 10.66$ 52.78$ 11% 12.21$ -1%2008 8.52$ 5.57$ 4.84$ 3.20$ 22.13$ -58% 8.52$ -30%2009 1.51$ 2.43$ 1.81$ 2.51$ 8.26$ -63% 1.51$ -82%2010 2.26$ 3.28$ 4.16$ 7.42$ 17.12$ 107% 2.26$ 50%2011 2.57$ 2.57$ 14%

OFFICE2006 24.11$ 32.05$ 34.63$ 46.00$ 136.79$ 32% 24.11$ 30%2007 73.51$ 60.41$ 46.25$ 28.97$ 209.14$ 53% 73.51$ 205%2008 15.52$ 16.77$ 14.32$ 7.65$ 54.26$ -74% 15.52$ -79%

Total YTD Q1

2009 3.68$ 2.86$ 4.84$ 4.61$ 15.98$ -71% 3.68$ -76%2010 4.15$ 8.03$ 10.13$ 19.66$ 41.97$ 163% 4.15$ 13%2011 9.77$ 9.77$ 136%

RETAIL2006 9.39$ 12.88$ 15.55$ 15.44$ 53.26$ 3% 9.39$ 0%2007 26.61$ 14.83$ 17.47$ 12.07$ 70.98$ 33% 26.61$ 183%2008 7.59$ 5.28$ 4.23$ 3.25$ 20.35$ -71% 7.59$ -71%2009 2.22$ 2.08$ 2.40$ 6.37$ 13.07$ -36% 2.22$ -71%2010 3.22$ 2.90$ 5.95$ 7.93$ 20.01$ 53% 3.22$ 45%2011 5.16$ 5.16$ 60%

TOTAL2006 72.28$ 75.35$ 79.92$ 102.54$ 330.10$ 17% 72.28$ 36%2007 133.75$ 109.61$ 102.01$ 87.54$ 432.91$ 31% 133.75$ 85%2008 45.07$ 37.08$ 33.57$ 19.16$ 134.88$ -69% 45.07$ -66%2009 9.69$ 10.70$ 12.77$ 18.88$ 52.05$ -61% 9.69$ -78%2010 14.43$ 19.59$ 29.52$ 47.31$ 110.86$ 113% 14.43$ 49%2011 24.64$ 24.64$ 71%





QUARTERLY SALES PRICES OF LARGER ($5 MILLION+)COMMERCIAL/MULTIFAMILY PROPERTIES

Properties and portfolios $5 million and greater

Price per unit or sq. ft.

$350

$200

$250

$300

$350

$0

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Q1

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2 Q

12

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2 Q

32

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3 Q

13

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33

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14

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34

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15

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35

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36

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39

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Apartment Industrial Office Retail Total

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6%

8%

10%

12%

$0

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$250

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$350

2001

Q1

2001

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2001

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2004

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2010

Q1

2010

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2010

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2010

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2011

Q1


0%

2%

4%

6%

8%

10%

12%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1


$0

$50

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$350

2001

Q1

2001

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2005

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2006

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Q1


0%

2%

4%

6%

8%

10%

12%

2001

Q1

2001

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2001

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2002

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Apartment Industrial Office Retail




QUARTERLY SALES PRICES OF LARGER ($5 MILLION+)COMMERCIAL/MULTIFAMILY PROPERTIES

Properties and portfolios $5 million and greater

Year Q1 Q2 Q3 Q4

Q1 Year-over-year % change Q1 Q2 Q3 Q4

Q1 Year-over-year % change

APARTMENT2006 107$ 93$ 102$ 121$ 22% 5.9% 6.1% 6.1% 6.2% -8%2007 100$ 100$ 110$ 101$ -6% 6.1% 6.1% 6.2% 6.2% 4%2008 97$ 94$ 114$ 86$ -3% 6.2% 6.4% 6.5% 7.0% 1%2009 85$ 87$ 81$ 86$ -12% 6.9% 7.0% 7.1% 7.0% 11%2010 120$ 97$ 116$ 109$ 41% 6.9% 6.8% 6.6% 6.5% 0%2011 104$ -13% 6.7% -3%

INDUSTRIAL2006 76$ 75$ 69$ 72$ 22% 7.1% 7.4% 7.2% 7.1% -13%2007 74$ 75$ 78$ 75$ -3% 6.9% 6.8% 6.9% 7.2% -3%2008 71$ 71$ 71$ 69$ -4% 7.2% 7.3% 7.5% 7.9% 4%2009 74$ 64$ 61$ 52$ 5% 8.3% 8.3% 8.6% 8.7% 15%2010 52$ 66$ 69$ 55$ -29% 8.7% 8.1% 8.5% 8.2% 5%2011 55$ 5% 7.7% -11%

OFFICE2006 214$ 217$ 234$ 222$ 16% 7.0% 7.1% 6.8% 6.8% -7%2007 270$ 295$ 254$ 265$ 26% 6.5% 6.3% 6.5% 6.5% -7%2008 240$ 286$ 276$ 213$ -11% 6 9% 7 0% 7 2% 7 3% 5%

Price per unit or sq. ft. Capitalization Rate

($/sq. ft)

($/sq. ft)

($1000/unit)

2008 240$ 286$ 276$ 213$ -11% 6.9% 7.0% 7.2% 7.3% 5%2009 265$ 137$ 192$ 176$ 11% 7.9% 8.0% 8.2% 8.9% 15%2010 144$ 202$ 218$ 231$ -46% 8.2% 8.0% 7.4% 7.1% 4%2011 228$ 58% 7.3% -12%

RETAIL2006 163$ 158$ 171$ 185$ 10% 6.8% 7.1% 6.9% 6.7% -7%2007 195$ 191$ 181$ 169$ 20% 6.6% 6.5% 6.6% 6.7% -3%2008 190$ 208$ 185$ 180$ -3% 6.9% 6.8% 6.8% 7.2% 3%2009 148$ 159$ 145$ 136$ -22% 7.3% 7.7% 8.1% 8.2% 7%2010 136$ 131$ 151$ 174$ -8% 8.2% 8.0% 7.7% 7.6% 12%2011 180$ 32% 7.6% -8%

TOTAL2006 124$ 128$ 139$ 145$ 13% 6.6% 6.9% 6.7% 6.6% -9%2007 169$ 163$ 149$ 129$ 36% 6.5% 6.4% 6.5% 6.5% -1%2008 124$ 141$ 145$ 121$ -27% 6.7% 6.9% 7.0% 7.3% 3%2009 127$ 97$ 109$ 103$ 3% 7.6% 7.7% 7.9% 8.1% 13%2010 106$ 117$ 131$ 125$ -16% 7.8% 7.7% 7.4% 7.2% 3%2011 132$ 24% 7.2% -8%


($/sq. ft)

($1000/unit or $/sq. ft)*




COMMERCIAL/MULTIFAMILY PROPERTY PRICES AS REFLECTEDIN SELECTED INDICES

Re-Indexed Values of the Moody's/REAL CPPI and NCREIF Transaction Based Index

December 2000 = 100

January 2007 = 100

90

100

110

120

130

140

150

160

170

180

190

200

Dec 2000

May 2001

Oct 2001

Mar 2002

Aug 2002

Jan 2003

Jun 2003

Nov 2003

Apr 2004

Sep 2004

Feb 2005

Jul 2005

Dec 2005

May 2006

Oct 2006

Mar 2007

Aug 2007

Jan 2008

Jun 2008

Nov 2008

Apr 2009

Sep 2009

Feb 2010

Jul 2010

Dec 2010

Moodys/REAL CPPI NCREIF TBI

January 2007 100

Source: MBA, Moody's Investors Services and MIT

90

100

110

120

130

140

150

160

170

180

190

200

Dec 2000

May 2001

Oct 2001

Mar 2002

Aug 2002

Jan 2003

Jun 2003

Nov 2003

Apr 2004

Sep 2004

Feb 2005

Jul 2005

Dec 2005

May 2006

Oct 2006

Mar 2007

Aug 2007

Jan 2008

Jun 2008

Nov 2008

Apr 2009

Sep 2009

Feb 2010

Jul 2010

Dec 2010

Moodys/REAL CPPI NCREIF TBI

50

60

70

80

90

100

110

120

Jan 2007

Mar 2007

May 2007

Jul 2007

Sep 2007

Nov 2007

Jan 2008

Mar 2008

May 2008

Jul 2008

Sep 2008

Nov 2008

Jan 2009

Mar 2009

May 2009

Jul 2009

Sep 2009

Nov 2009

Jan 2010

Mar 2010

May 2010

Jul 2010

Sep 2010

Nov 2010

Jan 2011

Mar 2011

Moody's/REAL CPPI NCREIF TBI




COMMERCIAL/MULTIFAMILY PROPERTY PRICES AS REFLECTEDIN SELECTED INDICES

Changes in the Moody's/REAL CPPI and NCREIF Transaction Based Index

Moody's/ REAL CPPI NCREIF TBI

2001 -- December 3.7% 0.6%2002 -- December 8.5% 7.2%2003 -- December 7.1% 1.3%2004 -- December 16.3% 11.0%2005 -- December 14.7% 27.2%2006 -- December 8.4% 17.3%2007 -- December 8.3% -1.2%2008 -- December -14.9% -15.0%2009 -- December -29.2% -22.5%2010 -- December -2.1% 19.3%

Month-over month Quarter-over-quarter

Moody's/ REAL CPPI Moody's/ REAL CPPI NCREIF TBI

2009 -- March -1.7% -7.7% -5.1%2009 -- April -8.6%2009 -- May -7.6%2009 -- June -1.0% -16.4% -17.9%2009 -- July -5.1%2009 -- August -3.0%2009 -- September -3.9% -11.5% 4.6%2009 -- October -1.5%2009 -- November 1.0%2009 -- December 4.1% 3.6% -4.9%2010 -- January 1.0%2010 -- February -2.6%2010 -- March -0.5% -2.1% 6.4%2010 -- April 1.7%2010 -- May 3.6%2010 -- June -4.0% 1.2% 6.9%2010 -- July -3.1%2010 -- August -3.3%2010 -- September 4.3% -2.3% -6.2%2010 -- October 1.3%2010 -- November 0.6%2010 -- December -0.9% 1.1% 11.9%2011 -- January -1.2%2011 -- February -3.3%2011 -- March -4.2% -8.5% -0.7%

Current price relative to peak 53% 72%

Source: Mortgage Bankers Association, Moody's Investors Services and MIT





PROFILE OF COMMERCIAL REAL ESTATE PROPERTIES BY CBSA, COUNTY AND STATE

Top 10 CBSA Ranked by Total Number of Commercial Properties, as of June 5, 2011

CBSA Name Number of Properties

New York-Northern New Jersey-Long Island, NY-NJ-PA 708,358Chicago-Joliet-Naperville, IL-IN-WI 661,805Houston-Sugar Land-Baytown, TX 591,241Riverside-San Bernardino-Ontario, CA 601,325Los Angeles-Long Beach-Santa Ana, CA 501,880Dallas-Fort Worth-Arlington, TX 457,328Phoenix-Mesa-Glendale, AZ 361,255Atlanta-Sandy Springs-Marietta, GA 308,088Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 307,721St. Louis, MO-IL 259,770

Top 10 Counties Ranked by Total Number of Commercial Properties

County Number of PropertiesLOS ANGELES County, CA 431,520COOK County, IL 363,490RIVERSIDE County, CA 332,034SAN BERNARDINO County, CA 269,291MARICOPA County, AZ 257,346HARRIS County, TX 239,696LEE County, FL 228,267SAN DIEGO County, CA 213,458KERN County, CA 182,908MOHAVE County, AZ 178,211

Top 10 States Ranked by Total Number of Commercial Properties

State Number of PropertiesTX 3,894,737CA 2,732,576FL 2,523,390OH 1,756,517IL 1,446,187NY 1,259,863PA 1,213,165IN 1,164,726NC 1,091,170IA 1,036,619Source: CoreLogic www.corelogic.com/cre

The data used in this report is compiled from multiple resources including county tax assessor and recorder of deeds sources, as well as proprietary resources. Property level records were used in aggregate to derive all the charts & graphs. Other property type represents commercially classified properties that are not categorized Apartment, Industrial, Retail, Office or Hotel in county records. Some examples are medical offices, agricultural sites such as farms, forests and vineyards as well as various recreational buildings. This classification also represents properties that were defined by the reporting appraisers office with a generic “commercial” classification and no sub-classification was available to us via the public records.




PROFILE OF COMMERCIAL REAL ESTATE SALES

Total Sales of U.S. Commercial and Multifamily Properties by Dollar Amount

1Q 2011 Rolling 4 QuartersNumber of Properties Sold Percent

Number of Properties Sold Percent

Apartment (10 or more units)Less than $1 million 1,510 57.0% 6,668 56.5%$1 - $5 million 907 34.3% 4,047 34.3%$5 - $10 million 113 4.3% 515 4.4%Greater than $10 million 117 4.4% 568 4.8%

IndustrialLess than $1 million 605 39.8% 2,719 38.8%$1 - $5 million 743 48.9% 3,419 48.8%$5 - $10 million 111 7.3% 495 7.1%Greater than $10 million 61 4.0% 377 5.4%

RetailLess than $1 million 818 46.1% 3,546 45.8%$1 - $5 million 824 46.4% 3,576 46.2%$5 - $10 million 68 3.8% 342 4.4%Greater than $10 million 64 3.6% 281 3.6%

OfficeLess than $1 million 378 44.9% 1,764 46.4%$1 - $5 million 337 40.1% 1,501 39.5%$5 - $10 million 45 5.4% 205 5.4%Greater than $10 million 81 9.6% 331 8.7%

HotelHotelLess than $1 million 39 22.5% 199 26.6%$1 - $5 million 97 56.1% 399 53.4%$5 - $10 million 17 9.8% 63 8.4%Greater than $10 million 20 11.6% 86 11.5%

OtherLess than $1 million 663 50.4% 3,039 48.7%$1 - $5 million 549 41.7% 2,744 44.0%$5 - $10 million 67 5.1% 268 4.3%Greater than $10 million 36 2.7% 191 3.1%

TotalLess than $1 million 4,013 48.5% 17,935 48.0%$1 - $5 million 3,457 41.8% 15,686 42.0%$5 - $10 million 421 5.1% 1,888 5.1%Greater than $10 million 379 4.6% 1,834 4.9%

Source: CoreLogic www.corelogic.com/cre

The data used in this report is compiled from multiple resources including county tax assessor and recorder of deeds sources, as well as proprietary resources. Property level records were used in aggregate to derive all the charts & graphs. Other property type represents commercially classified properties that are not categorized Apartment, Industrial, Retail, Office or Hotel in county records. Some examples are medical offices, agricultural sites such as farms, forests and vineyards as well as various recreational buildings. This classification also represents properties that were defined by the reporting appraisers office with a generic “commercial” classification and no sub-classification was available to us via the public records.




MULTIFAMILY BUILDING PERMITS, STARTS AND COMPLETIONS

Thousands of Units Permitted, Started and Completedin Structures with 5 or More Units, Seasonally Adjusted Annual Rate

1968 to present

800

1000

1200

1400

200

400

600

800

1000

1200

1400

1996 to present

0

200

400

600

800

1000

1200

1400

1968

1969

1971

1972

1974

1975

1977

1979

1980

1982

1983

1985

1987

1988

1990

1991

1993

1994

1996

1998

1999

2001

2002

2004

2006

2007

2009

Completions 5+ Permits 5+ Starts 5+ Median Starts 2001 - present (279)

1996 to present

0

200

400

600

800

1000

1200

1400

1968

1969

1971

1972

1974

1975

1977

1979

1980

1982

1983

1985

1987

1988

1990

1991

1993

1994

1996

1998

1999

2001

2002

2004

2006

2007

2009


400

500

600

0

200

400

600

800

1000

1200

1400

1968

1969

1971

1972

1974

1975

1977

1979

1980

1982

1983

1985

1987

1988

1990

1991

1993

1994

1996

1998

1999

2001

2002

2004

2006

2007

2009


100

200

300

400

500

600

0

200

400

600

800

1000

1200

1400

1968

1969

1971

1972

1974

1975

1977

1979

1980

1982

1983

1985

1987

1988

1990

1991

1993

1994

1996

1998

1999

2001

2002

2004

2006

2007

2009


0

100

200

300

400

500

600

1996 1996 1997 1998 1999 2000 2001 2001 2002 2003 2004 2005 2006 2006 2007 2008 2009 2010 2011


Source: U.S. Census Bureau




MULTIFAMILY BUILDING PERMITS, STARTS AND COMPLETIONS

Number of Units Permitted, Started and Completed in Structures with 5 or More Units, Seasonally Adjusted Annual Rate

Permits Starts Completions Permits Starts Completions

2000 329 299 305 -6.2% -2.4% 1.8%2001 335 293 281 1.8% -2.1% -7.8%2002 341 308 288 1.8% 5.2% 2.6%2003 346 315 261 1.3% 2.4% -9.5%2004 366 303 287 5.9% -3.9% 10.0%2005 389 311 258 6.3% 2.8% -10.1%2006 384 293 284 -1.3% -6.0% 10.2%2007 359 277 253 -6.5% -5.3% -11.0%2008 295 266 277 -17.7% -4.1% 9.6%2009 121 97 260 -59.0% -63.4% -6.3%2010 131 104 146 7.8% 7.2% -43.8%

May 2010 127 108 180 -9.3% 0.0% -0.6%Jun 2010 141 83 189 11.0% -23.1% 5.0%Jul 2010 144 102 97 2.1% 22.9% -48.7%Aug 2010 149 165 119 3.5% 61.8% 22.7%Sep 2010 134 144 137 -10.1% -12.7% 15.1%Oct 2010 124 93 115 -7.5% -35.4% -16.1%Nov 2010 124 82 114 0.0% -11.8% -0.9%Dec 2010 160 97 100 29.0% 18.3% -12.3%Jan 2011 129 187 86 -19.4% 92.8% -14.0%Feb 2011 137 112 121 6.2% -40.1% 40.7%Mar 2011 166 164 215 21.2% 46.4% 77.7%Apr 2011 147 123 108 -11.4% -25.0% -49.8%May 2011 190 134 108 29.3% 8.9% 0.0%

49.6% 24.1% -40.0%


Percent change May 2010 to May 2011

Percent ChangeThousands of Units

Year-over-year

Month-over-month




NEW PRIVATELY OWNED HOUSING UNITS STARTED, BY PURPOSEThousands of Units

Quarter TOTAL TotalFor

RentFor Sale

Percent for Rent

2004Q1 425 345 80 61 19 76%2004Q2 540 456 84 56 28 67%2004Q3 532 440 92 55 37 60%2004Q4 460 370 90 54 36 60%2005Q1 448 369 79 49 30 62%2005Q2 576 485 91 55 36 60%2005Q3 568 471 97 46 51 47%2005Q4 478 392 86 51 35 59%2006Q1 464 382 82 42 39 51%2006Q2 521 433 88 46 42 52%2006Q3 457 372 85 48 37 56%2006Q4 358 278 80 47 33 59%2007Q1 322 260 62 38 24 61%2007Q2 410 333 77 42 35 55%2007Q3 350 265 85 48 37 56%2007Q4 272 188 84 60 24 71%2008Q1 231 162 69 52 17 75%2008Q2 283 194 89 67 22 75%2008Q3 237 163 74 54 20 73%2008Q4 154 103 51 43 8 84%2009Q1 114 78 36 31 5 86%2009Q2 154 124 30 25 5 83%2009Q3 162 138 24 19 5 79%

Units in Buildings with 2 or More Units1-Family Units

2009Q3 162 138 24 19 5 79%2009Q4 124 105 19 16 3 84%2010Q1 134 114 20 16 4 80%2010Q2 172 142 30 26 4 87%2010Q3 161 119 42 36 6 86%2010Q4 120 96 24 21 3 88%2011Q1 125 89 36 30 5 83%


0

20

40

60

80

100

120

2003Q4 2004Q4 2005Q4 2006Q4 2007Q4 2008Q4 2009Q4 2010Q4

Th

ou

san

ds o

f un

its

2+ unit for sale

2+ unit for rent



RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOK PRODUCTION

3. Production Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations May 5, 2011 First quarter 2011 commercial and multifamily mortgage originations were 89 percent higher than during the same period last year and 25 percent lower than during the fourth quarter of 2010, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The decrease from fourth quarter 2010 reflects the industry’s usual push to finalize deals before the end of the year, and subsequent drop-offs in first quarter numbers. “The pace of commercial and multifamily mortgage lending continued to increase in the first quarter of this year,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “The percentage increases in commercial/multifamily mortgage origination volumes for the first three months of 2011 were the highest of any first quarter since 2002, and the volumes were nearly double the volume seen during the first quarter of 2010.” FIRST QUARTER 2011 EIGHTY-NINE PERCENT HIGHER THAN FIRST QUARTER 2010 The 89 percent overall increase in commercial/multifamily lending activity

during the first quarter of 2011 over the same period in 2010 was driven by increases in originations for all property types. When compared to the first quarter of 2010, this included a 465 percent increase in loans for hotel properties, a 194 percent increase in loans for industrial properties, a 104 percent increase in loans for multifamily properties, a 92 percent increase in loans for office properties, a 91 percent increase in loans for health care properties, and a 13 percent increase in loans for retail properties. Among investor types, first quarter 2011 originations for conduits for CMBS increased 391 percent compared to last year’s first quarter. There was also a 126 percent increase in loans for life insurance companies, a 73 percent increase for loans for commercial bank portfolios, and a 59 percent increase for Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. FIRST QUARTER 2011 TWENTY-FIVE PERCENT LOWER THAN FOURTH QUARTER 2010 First quarter 2011 commercial/multifamily mortgage originations were 25 percent lower than originations in the fourth quarter

Commercial/Multifamily Mortgage Bankers Originations Index 2001 quarterly average = 100




of 2010. This includes an 83 percent decrease for health care properties, a 48 percent decrease for retail properties, a 44 percent decrease for hotel properties, a 28 percent decrease for multifamily properties, and a 15 percent decrease for office properties. Originations for industrial properties increased 12 percent. Among investor types, first quarter 2011 originations for conduits for CMBS decreased 58 percent compared to the fourth quarter of 2010. There was also a 45 percent decrease for GSEs and a 15 percent decrease for life insurance companies. Originations for commercial bank portfolios increased by 21 percent. To view the report, please visit the following Web link: http://www.mortgagebankers.org/files/Research/CommercialOriginations/1Q11CMFOriginationsSurvey.pdf Detailed statistics on the size and scope of the commercial/multifamily origination market are available from these MBA commercial/multifamily research reports. • Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation, 2010 • Commercial Real Estate/Multifamily Finance Firms: Annual Origination Volumes, 2010




Commercial/Multifamily Mortgage Bankers Originations IndexBy Investor Group

Q1 Q2 Q3 Q4 Q1-to-Q1 Q1 Q2 Q3 Q4

TOTAL2006 205 253 258 328 34% 11.2$ 11.1$ 13.6$ 13.7$ 2007 280 352 247 275 37% 13.8$ 15.6$ 13.3$ 16.0$ 2008 132 130 116 54 -53% 12.3$ 12.3$ 10.8$ 9.0$ 2009 40 60 53 61 -70% 8.4$ 11.8$ 9.9$ 11.0$ 2010 45 61 70 114 12% 9.2$ 11.1$ 10.5$ 13.0$ 2011 85 89% 11.9$

Conduits2006 283 343 287 519 35% 13.6$ 15.3$ 15.3$ 21.1$ 2007 456 606 206 357 61% 18.4$ 18.4$ 14.0$ 52.9$ 2008 19 9 15 6 -96% 16.0$ 16.5$ 40.4$ 30.9$ 2009 1 4 2 1 -96% 5.5$ 20.4$ 18.2$ 12.4$ 2010 5 11 16 62 657% 45.4$ 37.4$ 30.5$ 69.6$ 2011 26 391% 33.4$

Commercial Banks2006 397 457 543 552 64% 10.3$ 8.6$ 15.9$ 12.1$ 2007 316 408 445 521 -20% 10.0$ 15.7$ 13.3$ 14.0$ 2008 228 289 129 74 -28% 11.2$ 17.6$ 6.0$ 8.9$ 2009 47 49 62 86 -80% 6.1$ 6.1$ 6.4$ 8.2$ 2010 45 44 32 64 -4% 4.9$ 7.0$ 4.9$ 7.6$ 2011 77 73% 9.0$

Life Insurance Companies2006 140 206 199 191 2% 8.7$ 9.0$ 10.6$ 9.1$ 2007 158 175 222 163 12% 9.9$ 9.6$ 13.0$ 9.7$ 2008 119 128 163 44 -25% 10.1$ 10.7$ 13.9$ 7.8$ 2009 41 59 69 93 -66% 13.4$ 12.5$ 12.4$ 15.6$ 2010 94 147 176 250 131% 17.0$ 16.1$ 15.5$ 17.0$ 2011 212 126% 17.5$

Fannie Mae/Freddie Mac2006 94 99 113 138 30% 12.9$ 10.2$ 12.4$ 11.6$ 2007 114 112 181 194 22% 9.8$ 10.2$ 14.3$ 10.9$ 2008 185 186 208 164 62% 11.7$ 10.1$ 13.3$ 12.0$ 2009 136 189 143 122 -26% 11.4$ 16.8$ 14.8$ 13.8$ 2010 70 85 120 202 -49% 9.8$ 11.3$ 12.6$ 13.5$ 2011 112 59% 10.8$

Percent Change, ($millions)(2001 Avg Qtr = 100)

Origination Volume Index Average Loan Size




Commercial/Multifamily Mortgage Bankers Originations IndexBy Property Type

Q1 Q2 Q3 Q4 Q1-to-Q1 Q1 Q2 Q3 Q4

Multifamily2006 143 166 155 238 23% 11.6$ 11.4$ 12.3$ 14.2$ 2007 180 195 176 220 26% 11.8$ 12.5$ 11.8$ 15.0$ 2008 132 113 123 83 -27% 12.6$ 11.0$ 12.1$ 11.4$ 2009 51 89 74 77 -61% 9.5$ 15.3$ 12.9$ 12.4$ 2010 49 67 101 138 -5% 9.4$ 11.1$ 12.6$ 13.0$ 2011 99 104% 11.9$

Office2006 198 255 277 375 26% 15.4$ 14.0$ 18.4$ 19.6$ 2007 321 302 191 100 62% 24.0$ 21.1$ 17.4$ 12.0$ 2008 79 105 76 28 -75% 15.7$ 19.0$ 15.6$ 10.8$ 2009 27 20 33 29 -66% 9.6$ 10.8$ 14.9$ 15.5$ 2010 35 55 45 79 29% 13.4$ 19.3$ 14.6$ 16.5$ 2011 68 92% 17.5$

Retail2006 307 343 327 423 55% 9.3$ 8.6$ 10.1$ 11.6$ 2007 384 459 264 264 25% 11.8$ 12.1$ 10.4$ 9.1$ 2008 181 169 185 47 -53% 15.8$ 13.5$ 15.5$ 7.5$ 2009 43 83 71 95 -76% 11.0$ 16.7$ 10.8$ 13.6$ 2010 85 75 84 184 98% 14.5$ 10.8$ 11.0$ 18.9$ 2011 96 13% 15.1$

Industrial2006 222 308 270 392 33% 8.3$ 8.7$ 9.8$ 10.1$ 2007 254 286 249 196 14% 10.5$ 10.2$ 10.2$ 9.4$ 2008 161 124 151 48 -37% 11.6$ 9.4$ 9.1$ 8.8$ 2009 80 43 64 76 -50% 18.4$ 7.2$ 8.9$ 11.4$ 2010 57 123 145 150 -28% 9.4$ 13.8$ 14.6$ 12.6$ 2011 168 194% 14.0$

Hotel2006 558 681 990 676 166% 24.8$ 28.7$ 42.5$ 24.6$ 2007 762 2,931 815 3,035 37% 31.6$ 55.8$ 33.8$ 199.5$ 2008 308 371 107 36 -60% 40.0$ 38.5$ 23.1$ 22.5$ 2009 36 84 57 74 -88% 67.5$ 29.0$ 35.3$ 48.7$ 2010 20 99 46 198 -46% 12.3$ 47.5$ 22.0$ 50.6$ 2011 110 465% 27.7$

Health Care2006 287 532 434 523 123% 12.6$ 10.7$ 9.7$ 10.2$ 2007 471 458 1,081 540 64% 8.4$ 11.7$ 14.6$ 10.7$ 2008 400 758 442 288 -15% 7.8$ 8.5$ 6.5$ 6.8$ 2009 82 224 183 289 -80% 3.7$ 4.7$ 5.9$ 10.7$ 2010 26 54 99 301 -68% 3.9$ 5.1$ 9.3$ 20.7$ 2011 50 91% 7.1$

Percent Change, ($millions)(2001 Avg Qtr = 100)

Origination Volume Index Average Loan Size




QUARTERLY ISSUANCE OFCOMMERCIAL MORTGAGE BACKED SECURITIES (CMBS) andCOMMERCIAL REAL ESTATE COLLATERALIZED DEBT OBLIGATIONS (CDOs)

Billions of Dollars

$80

$60

$70

$80

$30

$40

$50

$60

$70

$80

$-

$10

$20

$30

$40

$50

$60

$70

$80

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Source: Commercial Real Estate Direct

$-

$10

$20

$30

$40

$50

$60

$70

$80

2000

Q1

2000

Q2

2000

Q3

2000

Q4

2001

Q1

2001

Q2

2001

Q3

2001

Q4

2002

Q1

2002

Q2

2002

Q3

2002

Q4

2003

Q1

2003

Q2

2003

Q3

2003

Q4

2004

Q1

2004

Q2

2004

Q3

2004

Q4

2005

Q1

2005

Q2

2005

Q3

2005

Q4

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

CMBS CRE CDO/Re-Remics




QUARTERLY ISSUANCE OFCOMMERCIAL MORTGAGE BACKED SECURITIES (CMBS) andCOMMERCIAL REAL ESTATE COLLATERALIZED DEBT OBLIGATIONS (CRE CDOs)/RE-REMICS

Billions of Dollars

Year Q1 Q2 Q3 Q4 TotalPercent change Total

Percent change

U.S. CMBS ISSUANCE

2000 11.77$ 13.00$ 10.65$ 16.64$ 52.05$ 11.77$ 2001 11.53$ 15.57$ 19.53$ 24.53$ 71.16$ 37% 11.53$ -2%2002 9.74$ 14.93$ 12.81$ 16.54$ 54.03$ -24% 9.74$ -16%2003 14.94$ 20.45$ 17.51$ 25.09$ 77.99$ 44% 14.94$ 53%2004 18.99$ 24.50$ 21.47$ 28.82$ 93.78$ 20% 18.99$ 27%2005 33.13$ 39.37$ 38.27$ 57.40$ 168.17$ 79% 33.13$ 74%2006 46.01$ 42.18$ 42.25$ 72.25$ 202.69$ 21% 46.01$ 39%2007 60.85$ 75.92$ 60.10$ 33.30$ 230.17$ 14% 60.85$ 32%2008 5.91$ 6.24$ -$ -$ 12.15$ -95% 5.91$ -90%2009 -$ 1.79$ -$ 3.18$ 4.97$ -59% -$ -100%2010 -$ 2.91$ 1.93$ 6.18$ 11.01$ 121% -$ N/A2011 11.61$ 11.61$ N/A

CRE CDO/RE-REMICS ISSUANCE

2002 1.82$ 3.29$ 1.88$ 6.03$ 13.02$ 1.82$ 2003 2.37$ 1.16$ 1.05$ 1.22$ 5.80$ -55% 2.37$ 30%2004 1.16$ 2.48$ 2.39$ 1.77$ 7.80$ 35% 1.16$ -51%

Annual YTD Q1

$ $ $ $ $ $2005 4.29$ 4.42$ 6.72$ 5.90$ 21.33$ 173% 4.29$ 268%2006 6.43$ 7.18$ 10.70$ 12.26$ 36.57$ 71% 6.43$ 50%2007 6.61$ 13.56$ 5.09$ 3.40$ 28.66$ -22% 6.61$ 3%2008 -$ -$ -$ -$ -$ -100% -$ -100%2009 -$ 0.71$ 0.32$ -$ 1.03$ N/A -$ N/A2010 -$ 0.15$ 0.32$ 0.94$ 1.40$ 36% -$ N/A2011 -$ -$ N/A

TOTAL

2002 11.56$ 18.22$ 14.69$ 22.58$ 67.05$ 11.56$ 2003 17.31$ 21.61$ 18.56$ 26.31$ 83.79$ 25% 17.31$ 50%2004 20.16$ 26.98$ 23.86$ 30.59$ 101.58$ 21% 20.16$ 16%2005 37.42$ 43.79$ 44.99$ 63.30$ 189.50$ 87% 37.42$ 86%2006 52.43$ 49.37$ 52.95$ 84.52$ 239.26$ 26% 52.43$ 40%2007 67.46$ 89.48$ 65.19$ 36.70$ 258.82$ 8% 67.46$ 29%2008 5.91$ 6.24$ -$ -$ 12.15$ -95% 5.91$ -91%2009 -$ 2.51$ 0.32$ 3.18$ 6.01$ -51% -$ -100%2010 -$ 3.05$ 2.25$ 7.11$ 12.41$ 107% -$ N/A2011 11.61$ 11.61$ N/A





QUARTERLY COMMERCIAL MORTGAGE COMMITMENTS BY LIFE INSURANCE COMPANIES

Billions of Dollars

$14

$10

$12

$14

$6

$8

$10

$12

$14

$

$2

$4

$6

$8

$10

$12

$14

Source: American Council of Life Insurance Companies (ACLI)

$-

$2

$4

$6

$8

$10

$12

$14

2001

Q1

2001

Q2

2001

Q3

2001

Q4

2002

Q1

2002

Q2

2002

Q3

2002

Q4

2003

Q1

2003

Q2

2003

Q3

2003

Q4

2004

Q1

2004

Q2

2004

Q3

2004

Q4

2005

Q1

2005

Q2

2005

Q3

2005

Q4

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

a. Annual figures may not equal the sum of quarterly figures due to change in reporting.




QUARTERLY COMMERCIAL MORTGAGE COMMITMENTS BY LIFE INSURANCE COMPANIES

Billions of Dollars


Percent change

2001 5.95$ 7.56$ 7.33$ 6.08$ 26.92$ 5.95$ 2002 5.69$ 6.34$ 7.12$ 9.17$ 28.32$ 5% 5.69$ -4%2003 7.22$ 7.88$ 9.28$ 8.30$ 32.68$ 15% 7.22$ 27%2004 7.46$ 12.11$ 10.20$ 8.91$ 38.67$ 18% 7.46$ 3%2005 7.33$ 12.37$ 10.96$ 12.51$ 43.17$ 12% 7.33$ -2%2006 9.76$ 12.66$ 11.35$ 10.31$ 44.08$ 2% 9.76$ 33%2007 9.29$ 10.25$ 11.49$ 11.67$ 42.69$ -3% 9.29$ -5%2008 9.59$ 6.03$ 7.03$ 4.02$ 26.67$ -38% 9.59$ 3%2009 2.62$ 4.63$ 4.30$ 4.83$ 16.39$ -39% 2.62$ -73%2010 4.90$ 5.94$ 9.47$ 10.39$ 30.71$ 87% 4.90$ 87%2011 7.83$ 7.83$ 60%

Source: American Council of Life Insurance Companies (ACLI)a. Annual figures may not equal the sum of quarterly figures due to changes in reporting.

Annual (a) YTD Q1



RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOK OUTSTANDING

4. Commercial/Multifamily Mortgage Debt Outstanding June 16, 2011 The level of commercial/multifamily mortgage debt outstanding remained essentially unchanged at $2.4 trillion in the first quarter of 2011, decreasing by 0.1 percent from fourth quarter 2010, according to the Mortgage Bankers Association’s (MBA) analysis of the Federal Reserve Board Flow of Funds data. MBA’s analysis was changed in the fourth quarter of 2010 to more accurately reflect the true level of mortgages backed by income-producing commercial and

multifamily properties. The changes are detailed in Appendix A of the report. The $2.4 trillion in commercial/multifamily mortgage debt outstanding was $3 billion lower than the fourth quarter 2010 figure. Multifamily mortgage debt outstanding rose to $800 billion, an increase of $3 billion or 0.4 percent from the fourth quarter. “New commercial and multifamily mortgage lending offset the amount of debt paid-off and paid-down during the first quarter,

Commercial Multifamily Mortgage Debt Outstanding By Investor Group, First Quarter 2011




leaving the outstanding balance essentially unchanged,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Five of the seven largest investor groups increased their holdings of commercial and multifamily mortgages during the quarter. Banks and thrifts and finance companies saw declines in the balances of commercial and multifamily mortgages they hold.” The Federal Reserve Flow of Funds data summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in this data under Life Insurance Companies) and in commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDOs) and other asset backed securities (ABS) for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issuers). MBA recently improved its reporting of commercial and multifamily mortgage debt outstanding. The new reporting excludes two categories of loans that had formerly been included – loans for acquisition, development and construction and loans collateralized by owner-occupied commercial properties. By excluding these loan types, the analysis here more accurately reflects the balance of loans supported by office buildings, retail centers, apartment buildings and other income-producing properties that rely on rents and leases to make their payments. Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $794 billion, or 33 percent of the total. CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $626 billion, or 26 percent of the total. Agency and GSE portfolios and MBS hold $327 billion, or 14 percent of the total, and life insurance companies hold $299 billion,

or 13 percent of the total. Many life insurance companies, banks and the GSEs purchase and hold a large number of CMBS, CDO and other ABS issues. These loans appear in the CMBS, CDO and other ABS categories. MULTIFAMILY MORTGAGE DEBT OUTSTANDING Looking solely multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of multifamily mortgages, with $327 billion or 41 percent of the total multifamily debt outstanding. They are followed by banks and thrifts with $214 billion, or 27 percent of the total. CMBS, CDO and other ABS issuers hold $98 billion, or 12 percent of the total; state and local governments hold $75 billion, or 9 percent of the total; life insurance companies hold $47 billion, or 6 percent of the total; and the federal government holds $14 billion, or 2 percent of the total. CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING In the first quarter of 2011, commercial banks saw the largest decrease in dollar terms in their holdings of commercial/multifamily mortgage debt – a decrease of $8 billion or 1 percent. Finance companies decreased their holdings of commercial/multifamily mortgages by $3 billion or 4 percent. Agency and GSE portfolios and MBS; CMBS, CDO and other ABS issuers; life insurance companies; the Federal government; and state and local governments; all increased their holdings. In percentage terms, the household sector saw the largest decrease in their holdings of commercial/multifamily mortgages, a drop of 5 percent. Agency and GSE portfolios and MBS saw their holdings increase one percent. CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING The $3 billion increase in multifamily mortgage debt outstanding between the fourth quarter 2010 and first quarter 2011 represents a 0.4 percent increase. In dollar terms, agency and GSE portfolios and MBS




saw the largest increase in their holdings of multifamily mortgage debt, an increase of $4 billion, or 1 percent. State and local government increased their holdings of multifamily mortgage debt by $805 million, or 1 percent. Life insurance companies increased by $140 million, or 0.3 percent. CMBS, CDO, and other ABS issues saw the biggest decrease in their holdings of multifamily mortgage debt, by $688 million or 0.7 percent. In percentage terms, agency and GSE portfolios and MBS recorded the biggest increase in their holdings of multifamily mortgages at 1 percent. Nonfinancial corporate business saw the biggest decrease at 40 percent. MBA’s analysis is based on data from the Federal Reserve Board’s Flow of Funds Account of the United States and the Federal Deposit Insurance Corporation’s Quarterly Banking Profile. More information on the construction of this data series is contained in Appendix A in the report.




COMMERCIAL AND MULTIFAMILY MORTGAGE DEBT OUTSTANDING

Total Commercial and Multifamily Mortgage Debt Outstanding, by Quarter

($millions)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

20

07

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

08

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

09

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

11

Q1

MF Commercial

Source: MBA, Federal Reserve Board of Governors, and FDIC




QUARTERLY COMMERCIAL AND MULTIFAMILY MORTGAGE DEBT OUTSTANDING

Commercial and Multifamily Mortgage Debt Outstanding, by Sector

Mortgage Debt Outstanding

2011 Q1

($millions) Percent

2010 Q4Change

($millions)% of total ($millions)

% of total

Sector Share of $ Change

Bank and Thrift 793,794 802,248 -8,454 -1.1%33.4% 33.7% 289.3%

CMBS, CDO and other ABS issues 626,215 622,541 3,674 0.6%26.3% 26.2% -125.7%

Agency and GSE portfolios and MBS 327,333 323,376 3,957 1.2%13.8% 13.6% -135.4%

Life insurance companies 299,442 298,556 886 0.3%12.6% 12.5% -30.3%

State and local government 90,353 89,527 826 0.9%3.8% 3.8% -28.3%

Federal government 79,253 78,433 820 1.0%3.3% 3.3% -28.1%

Finance companies 60,985 63,611 -2,626 -4.1%2.6% 2.7% 89.9%

REITs 30,474 30,626 -152 -0.5%1.3% 1.3% 5.2%

Nonfarm noncorporate business 20,990 21,064 -74 -0.4%0.9% 0.9% 2.5%

Household sector 15,810 16,720 -910 -5.4%0.7% 0.7% 31.1%

Private pension funds 12,638 12,837 -199 -1.6%0.5% 0.5% 6.8%

Nonfinancial corporate business 10,330 10,815 -485 -4.5%0.4% 0.5% 16.6%

State and local government retirement funds 5,895 6,031 -136 -2.3%0.2% 0.3% 4.7%

Other insurance companies 4,090 4,139 -49 -1.2%0.2% 0.2% 1.7%

2,377,602 2,380,524TOTAL -2,922 -0.1%


Note: Beginning with the Q4 2010 release, MBA's analysis of mortgage debt outstanding more accurately reflects the true level of mortgages backed by income-producing commercial and multifamily properties. Previous releases do not incorporate these improvements.





Total Commercial and Multifamily Mortgage Debt Outstanding, by Sector

($millions)


4,090

5,895

10,330

12,638

15,810

20,990

30,474

60,985

79,253

90,353

299,442

327,333

626,215

793,794

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

Other insurance companies

State and local government retirement funds

Nonfinancial corporate business

Private pension funds

Household sector

Nonfarm noncorporate business

REITs

Finance companies

Federal government

State and local government

Life insurance companies

Agency and GSE portfo lios and M BS

CM BS, CDO and other ABS issues

Bank and Thrift

2010Q4 2011Q1





Total Commercial and Multifamily Mortgage Debt Outstanding, by Selected Sector by Quarter

($millions)


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

Agency and GSE portfolios and MBS Bank and Thrift

CMBS, CDO and other ABS issues Life insurance companies




COMMERCIAL AND MULTIFAMILY MORTGAGE FLOWS

Net Change in Commercial and Multifamily Mortgage Debt Outstanding, by Quarter

($millions)


(40,000)

(20,000)

0

20,000

40,000

60,000

80,000

100,000

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

MF Commercial TOTAL




COMMERCIAL AND MULTIFAMILY MORTGAGE FLOWS

Net Change in Commercial and Multifamily Mortgage Debt Outstanding, by Sector

($millions)


(8,454)

(2,626)

(910)

(485)

(200)

(152)

(136)

(74)

(49)

820

826

886

3,674

3,957

(15,000) (10,000) (5,000) 0 5,000 10,000

Bank and Thrift

Finance companies

Household sector



REITs



Other insurance companies

Federal government





2010Q4 2011Q1




MULTIFAMILY MORTGAGE DEBT OUTSTANDING





Total Multifamily Mortgage Debt Outstanding, by Quarter

($millions)


0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

20

07

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

08

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

09

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

11

Q1




QUARTERLY MULTIFAMILY MORTGAGE DEBT OUTSTANDING

Multifamily Mortgage Debt Outstanding, by Sector

Mortgage Debt Outstanding

2011 Q1

($millions) Percent

2010 Q4Change

($millions)% of total ($millions)

% of total

Sector Share of $ Change

Agency and GSE portfolios and MBS 327,333 323,376 3,957 1.2%40.9% 40.6% 124.1%

Bank and Thrift 214,447 214,741 -294 -0.1%26.8% 27.0% -9.2%

CMBS, CDO and other ABS issues 98,007 98,695 -688 -0.7%12.3% 12.4% -21.6%

State and local government 74,944 74,139 805 1.1%9.4% 9.3% 25.2%

Life insurance companies 47,386 47,246 140 0.3%5.9% 5.9% 4.4%

Federal government 14,311 14,364 -53 -0.4%1.8% 1.8% -1.7%

Nonfarm noncorporate business 11,619 11,660 -41 -0.4%1.5% 1.5% -1.3%

Finance companies 3,807 4,081 -274 -6.7%0.5% 0.5% -8.6%

Private pension funds 3,093 3,144 -51 -1.6%0.4% 0.4% -1.6%

State and local government retirement funds 2,763 2,827 -64 -2.3%0.3% 0.4% -2.0%

REITs 1,629 1,711 -82 -4.8%0.2% 0.2% -2.6%

Nonfinancial corporate business 250 416 -166 -39.9%0.0% 0.1% -5.2%

799,589 796,400TOTAL 3,189 0.4%


Note: Beginning with the Q4 2010 release, MBA's analysis of mortgage debt outstanding more accurately reflects the true level of mortgages backed by income-producing commercial and multifamily properties. Previous releases do not incorporate these improvements.





Total Multifamily Mortgage Debt Outstanding, by Sector

($millions)


250

1,629

2,763

3,093

3,807

11,619

14,311

47,386

74,944

98,007

214,447

327,333

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000


REITs



Finance companies


Federal government




Bank and Thrift


2010Q4 2011Q1





Total Multifamily Mortgage Debt Outstanding, by Selected Sector by Quarter

($millions)


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1980

Q1

1981

Q1

1982

Q1

1983

Q1

1984

Q1

1985

Q1

1986

Q1

1987

Q1

1988

Q1

1989

Q1

1990

Q1

1991

Q1

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

Agency and GSE portfolios and MBS Bank and Thrift

CMBS, CDO and other ABS issues Life insurance companies





MULTIFAMILY MORTGAGE FLOWS

Net Change in Multifamily Mortgage Debt Outstanding, by Quarter

($millions)

Source: MBA. Federal Reserve Board of Governors, and FDIC

(5,000)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1




MULTIFAMILY MORTGAGE FLOWS

Net Change in Multifamily Mortgage Debt Outstanding, by Sector

($millions)


-688

-294

-274

-166

-82

-64

-53

-51

-41

140

805

3,957

(6,000) (4,000) (2,000) 0 2,000 4,000 6,000 8,000 10,000


Bank and Thrift

Finance companies


REITs


Federal government






2010Q4 2011Q1




APPENDIX A MBA’s analysis is based on data from the Federal Reserve Board’s Flow of Funds Account of the United States and the Federal Deposit Insurance Corporation’s Quarterly Banking Profile MBA’s analysis of commercial and multifamily mortgage debt outstanding was changed in the fourth quarter of 2010 to exclude two categories of loans that had previously been included;

a. loans for acquisition, development and construction and

b. loans collateralized by owner-occupied commercial properties.

By excluding these loan types, MBA’s analysis more accurately reflects the balance of loans supported by office buildings, retail centers, apartment buildings and other income-producing properties that rely on rents and leases to make their payments. For the first quarter 2011, the Federal Reserve Board’s Flow of Funds Accounts data attributed $1.6 trillion of outstanding commercial and multifamily mortgages to banks and thrifts. Comparing this number to the FDIC’s Quarterly Banking Profile for the same period, one sees that banks and thrifts held $214.5 billion of multifamily mortgages and $1,064.5 billion of non-farm nonresidential mortgages, of which 54 percent or $579 billion were income-producing. The combined $794 billion of mortgages backed by multifamily and other income-producing properties is included in this analysis. The $1.6 trillion total reported by the Federal Reserve also includes $485 billion of loans collateralized by owner-occupied commercial properties and another $296 billion of loans backed by acquisition, development and construction projects (including those for single-family development), which are excluded in from this analysis.

Estimated Components of Federal Reserve’s Flow of Funds “Commercial and Multifamily Mortgages” Held by Banks and Thrifts ($Billions)

Construction loans, $296

Owner-occupied

commercial mortgages,

$485

Income-producing

commercial mortgages,

$579

Multifamily mortgages,

$214.5





Commercial/Multifamily Mortgage Delinquencies Commercial/Multifamily Mortgage Delinquency Rates Mixed in First Quarter June 8, 2011 Delinquency rates among different commercial/multifamily mortgage investor groups were mixed in the first quarter of 2011, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. The delinquency rate for loans held in CMBS reached the highest level since the series began in 1997, but the climb was slower than in recent quarters. Delinquency rates for other groups remain below levels seen in the last major real estate downturn during the early 1990’s, some by large margins. Between the fourth quarter of 2010 and first quarter of 2011, the 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained the same at 4.18 percent. The 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) increased 0.23 percentage points to 9.18 percent. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.05 percentage points to 0.14 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae decreased 0.07 percentage points to 0.64 percent. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.10 percentage points to 0.36 percent. The first quarter 2011 delinquency rate for commercial and multifamily mortgages held by banks and thrifts was 2.40 percentage points lower than the series high (6.58 percent reached in the second quarter of 1991). The rate for loans held in CMBS was a record high for the series. The delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.23 percentage

points lower than the series high (7.37 percent reached during the fourth quarter of 1993); the rate for multifamily loans held by Fannie Mae was 2.98 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991); and the rate for multifamily loans held by Freddie Mac was 6.45 percentage points lower than the series high (6.81 percent reached in 1992). Please note: In March 2011, MBA released a DataNote covering the performance of commercial and multifamily mortgages at commercial banks and thrifts over the entire year 2010. The DataNote found that commercial and multifamily mortgages had the lowest charge-off rates of any major loan type and had delinquency rates lower than the overall book of loans and leases held by banks and thrifts. The DataNote can be found at: www.mortgagebankers.org/research Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together these groups hold




more than 86 percent of commercial/multifamily mortgage debt outstanding. The analysis incorporates the same measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the first quarter were as follows:

• CMBS: 9.18 percent (30+ days delinquent or in REO);

• Life company portfolios: 0.14 percent (60+days delinquent);

• Fannie Mae: 0.64 percent (60 or more days delinquent)

• Freddie Mac: 0.36 percent (60 or more days delinquent);

• Banks and thrifts: 4.18 percent (90 or more days delinquent or in non-accrual).

Differences between the delinquency measures are detailed in Appendix A.




CHART 1. COMMERCIAL/MULTIFAMILY MORTGAGE DELINQUENCYRATES AMONG MAJOR INVESTOR GROUPS

Selected delinquency rates at the end of the period

NOTE: Delinquency rates shown are NOT comparable between investor groups. These rates show how performance of loans for each investor groups has varied over time, but cannot be used to compare one investor group to another.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

Banks & Thrifts (90+ days)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

CMBS (30+ days and REO)

7 0%

8.0%Life Companies (60+ days)

7 0%

8.0% Fannie Mae* (60+ days)

Freddie Mac^ (60+ days)

Sources: Wachovia Capital Markets, LLC and Intex Solutions, Inc., American Council of Life Insurers, Fannie Mae, Freddie Mac, OFHEO and Federal Deposit Insurance Corporation

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

Life Companies (60+ days)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1990

--

Q1

1991

--

Q1

1992

--

Q1

1993

--

Q1

1994

--

Q1

1995

--

Q1

1996

--

Q1

1997

--

Q1

1998

--

Q1

1999

--

Q1

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

Fannie Mae* (60+ days)





CHART 2. COMMERCIAL/MULTIFAMILY MORTGAGE DELINQUENCYRATES AMONG MAJOR INVESTOR GROUPS, 2000 - PRESENT



0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


1.0% 1.0%

Sources: Wachovia Capital Markets, LLC and Intex Solutions, Inc., American Council of Life Insurers, Fannie Mae, Freddie Mac, OFHEO and Federal Deposit Insurance Corporation

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1


0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

Life Companies (60+ days)

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

2000

--

Q1

2001

--

Q1

2002

--

Q1

2003

--

Q1

2004

--

Q1

2005

--

Q1

2006

--

Q1

2007

--

Q1

2008

--

Q1

2009

--

Q1

2010

--

Q1

2011

--

Q1

Fannie Mae* (60+ days)





COMMERCIAL/MULTIFAMILY MORTGAGE DELINQUENCY RATESAMONG MAJOR INVESTOR GROUPS


CMBS Life

Companies Fannie Mae Freddie MacBanks & Thrifts

(30+ days and REO) (60+ days) (60+ days) (60+days) (90+ days)

Year-end1996 -- Q4 n.a. 1.79% 0.68% 1.96% 1.63%1997 -- Q4 0.39% 0.90% 0.37% 0.96% 1.19%1998 -- Q4 0.54% 0.48% 0.29% 0.37% 0.93%1999 -- Q4 0.51% 0.25% 0.12% 0.14% 0.71%2000 -- Q4 0.81% 0.28% 0.04% 0.04% 0.67%2001 -- Q4 1.26% 0.12% 0.33% 0.15% 0.90%2002 -- Q4 1.47% 0.28% 0.13% 0.13% 0.86%2003 -- Q4 1.72% 0.12% 0.13% 0.05% 0.78%2004 -- Q4 1.29% 0.08% 0.10% 0.06% 0.61%2005 -- Q4 0.84% 0.05% 0.27% 0.00% 0.53%2006 -- Q4 0.41% 0.02% 0.08% 0.05% 0.59%2007 -- Q4 0.39% 0.01% 0.08% 0.02% 0.85%2008 -- Q4 1.17% 0.07% 0.30% 0.01% 1.66%2009 -- Q4 5.70% 0.19% 0.63% 0.20% 3.94%2010 -- Q4 8.95% 0.19% 0.71% 0.26% 4.18%

Quarter-end


Quarter-end2008 -- Q1 0.48% 0.01% 0.09% 0.04% 1.05%2008 -- Q2 0.53% 0.03% 0.11% 0.04% 1.22%2008 -- Q3 0.63% 0.06% 0.16% 0.05% 1.39%2008 -- Q4 1.17% 0.07% 0.30% 0.08% 1.66%2009 -- Q1 1.86% 0.12% 0.34% 0.12% 2.29%2009 -- Q2 3.91% 0.15% 0.51% 0.15% 2.95%2009 -- Q3 4.08% 0.23% 0.62% 0.15% 3.46%2009 -- Q4 5.70% 0.19% 0.63% 0.20% 3.94%2010 -- Q1 6.83% 0.31% 0.79% 0.22% 4.27%2010 -- Q2 8.24% 0.29% 0.80% 0.22% 4.34%2010 -- Q3 8.59% 0.22% 0.65% 0.31% 4.41%2010 -- Q4 8.95% 0.19% 0.71% 0.26% 4.18%2011 -- Q1 9.18% 0.14% 0.64% 0.36% 4.18%

Sources: Wachovia Capital Markets, LLC and Intex Solutions, Inc., American Council of Life Insurers, Fannie Mae, Freddie Mac, OFHEO and Federal Deposit Insurance Corporation.

Note: Differences between the delinquency measures are detailed in Appendix A.




APPENDIX A SOURCES & MEASURES OF DELINQUENCIES Commercial Mortgage-backed Securities (CMBS) Source: Wachovia Capital Markets, LLC and Intex Solutions, Inc. The delinquency rate for CMBS loans covers loans 30+ days delinquent, including those in foreclosure, and real estate owned (REO). The CMBS rate is the only one to include REO in either the numerator or the denominator. This series includes all private-label (non-Ginnie Mae, Fannie Mae or Freddie Mac issued) deals that are currently outstanding, including both fixed- and floating-rate deals. Life Companies Source: American Council of Life Insurers The delinquency rate for life insurance company loans covers loans 60+ days delinquent, including those in foreclosure, and does not include real estate owned (REO) in either the numerator or the denominator. Fannie Mae Source: Fannie Mae Monthly Volume Summary and Office of Federal Housing Enterprise Oversight Annual Reports to Congress The delinquency rate for multifamily loans either held in portfolio or securitized and guaranteed by the company covers loans 60+ days delinquent, including those in foreclosure, and does not include real estate owned (REO) in either the numerator or the denominator. The company was unable to provide December delinquency figures for the years 2000 to 2004, so the fourth quarter numbers presented for those years are November, rather December, figures. In January 2011, we revised our 2010 monthly multifamily delinquency rates for all periods presented to exclude multifamily borrowers who have entered into a forbearance agreement and are abiding by the terms of the agreement, but had been previously included in our multifamily delinquency rates due to an error.

Freddie Mac Source: Freddie Mac Monthly Volume Summary and Office of Federal Housing Enterprise Oversight Annual Reports to Congress The delinquency rate for multifamily loans either held in portfolio or securitized and guaranteed by the company covers loans 60+ days delinquent, including those in foreclosure, and does not include real estate owned (REO) in either the numerator or the denominator. Freddie Mac notes that their delinquency rate “[e]xcludes mortgage loans whose original contractual terms have been modified under an agreement with the borrower as long as the borrower complies with the modified contractual terms.” As an example, after Hurricane Katrina, Freddie Mac modified a number of loans affected by the storms. In May 2010, Freddie Mac returned to reporting multifamily delinquencies as those loans 60+ days delinquent. FDIC-insured Banks & Thrifts Source: Federal Deposit Insurance Corporation The delinquency rate for FDIC banks and thrifts covers loans 90+ days delinquent, including those in foreclosure and in non-accrual status, and does not include real estate owned (REO) in either the numerator or the denominator. The universe of loans covered by this series also includes a large number of “owner-occupied” commercial loans – loans supported by the income of the resident business rather than by rent and lease payments. In a 2007 analysis by MBA of the ten banks with the largest commercial mortgage portfolios, approximately half, in dollar volume, of their commercial (non-multifamily) loan portfolio was comprised of these “owner-occupied” properties. Data are available for life companies, FDIC-insured banks and thirfts, Fannie Mae and Freddie Mac since 1990 and CMBS since 1997.




COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS)OUTSTANDING

Billions of Dollars


Percent change

U.S. CMBS OUTSTANDING

1998 64.37$ 86.50$ 103.14$ 126.09$ 1999 136.53$ 149.37$ 160.70$ 172.78$ 72.17$ 112% 10.45$ 7.7%2000 178.27$ 183.45$ 192.24$ 200.77$ 41.73$ 31% 5.48$ 3.1%2001 210.05$ 222.22$ 238.55$ 245.70$ 31.79$ 18% 9.28$ 4.4%2002 255.08$ 263.82$ 271.77$ 279.81$ 45.03$ 21% 9.38$ 3.7%2003 284.26$ 300.44$ 313.48$ 326.40$ 29.17$ 11% 4.45$ 1.6%2004 334.72$ 352.06$ 369.77$ 383.30$ 50.47$ 18% 8.32$ 2.5%2005 395.26$ 418.40$ 454.41$ 484.79$ 60.54$ 18% 11.96$ 3.0%2006 506.17$ 546.51$ 582.53$ 631.98$ 110.91$ 28% 21.38$ 4.2%2007 661.99$ 724.27$ 804.95$ 820.95$ 155.81$ 31% 30.01$ 4.5%2008 817.69$ 811.70$ 799.98$ 788.90$ 155.70$ 24% (3.26)$ -0.4%2009 779.84$ 766.98$ 753.09$ 740.77$ (37.85)$ -5% (9.07)$ -1.2%2010 728.32$ 711.64$ 693.03$ 672.11$ (51.51)$ -7% (12.45)$ -1.7%2011 652.67$ (75.65)$ -10% (19.43)$ -3.0%

Source: Wachovia Capital Markets, LLC, and Intex Solutions, Inc.

Annual Q4-to-Q1 Change




COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS) OUTSTANDING

Billions of Dollars

$900

$600

$700

$800

$900

$400

$500

$600

$700

$800

$900

$100

$200

$300

$400

$500

$600

$700

$800

$900


$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011




COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS)MARKET COMPOSITION

Composition of CMBS Outstanding, as of March 30, 2011

Total CMBS Outstanding 652.7$ billion

By Property Types:Office 31.5%Multifamily 15.2%Retail 30.0%Industrial 5.1%Hotel 9.6%Self-Storage 1.8%Healthcare 0.6%Other 6.1%

By Amortization:Fully Amortizing 35.5%All Interest-Only (IO) 64.5% Full Term IO 34.1% Part Term IO 30.3%

By Percent Defeased 5.3%

Office, 31.5%

Multifamily, 15.2%

Retail, 30.0%

Industrial,5.1%

Hotel, 9.6%

Self-Storage,

1.8%

Healthcare, 0.6% Other, 6.1%

Fully Amortizing,

35.5%

Part Term IO, 30.3%

By Delinquency:Current 90.82%30-day delinquent 0.82%60-day delinquent 0.52%90+day delinquent 3.80%Foreclosure/REO 4.04%


Office, 31.5%

Multifamily, 15.2%

Retail, 30.0%

Industrial,5.1%

Hotel, 9.6%

Self-Storage,

1.8%

Healthcare, 0.6% Other, 6.1%

Fully Amortizing,

35.5%

Full Term IO, 34.1%

Part Term IO, 30.3%




CMBS SPREADSCOMMERCIAL MORTGAGE BACKED SECURITIES (CMBS)SPREADS TO SWAP RATES(in Basis Points)


0

2000

4000

6000

8000

10000

12000

14000

16000

Au

g-0

8

Se

p-0

8

Oct

-08

No

v-0

8

De

c-0

8

Jan

-09

Fe

b-0

9

Apr

-09

Ma

y-0

9

Jun

-09

Jul-

09

Au

g-0

9

Se

p-0

9

Oct

-09

De

c-0

9

Jan

-10

Fe

b-1

0

Ma

r-10

Apr

-10

Ma

y-1

0

Jul-

10

Au

g-1

0

Se

p-1

0

Oct

-10

No

v-1

0

De

c-1

0

Jan

-11

Ma

r-11

Apr

-11

Ma

y-1

1

Super Senior AAA Junior AAA AA A BBB BBB-

AAA CMBS SPREADS(in Basis Points)

Source: Commercial Mortgage Alert

0

2000

4000

6000

8000

10000

12000

14000

16000

Au

g-0

8

Se

p-0

8

Oct

-08

No

v-0

8

De

c-0

8

Jan

-09

Fe

b-0

9

Apr

-09

Ma

y-0

9

Jun

-09

Jul-

09

Au

g-0

9

Se

p-0

9

Oct

-09

De

c-0

9

Jan

-10

Fe

b-1

0

Ma

r-10

Apr

-10

Ma

y-1

0

Jul-

10

Au

g-1

0

Se

p-1

0

Oct

-10

No

v-1

0

De

c-1

0

Jan

-11

Ma

r-11

Apr

-11

Ma

y-1

1

Super Senior AAA Junior AAA AA A BBB BBB-

0

200

400

600

800

1000

1200

1400

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010




CMBS SPREADSCommercial Mortgage Backed Securities (CMBS)Spreads to Swap Rates

(in Basis Points)

Super Senior AAA

Junior AAA AA A BBB BBB-

31-Dec-04 25 28 33 41 80 12030-Dec-05 28 38 48 59 120 18329-Dec-06 23 30 38 47 75 9228-Dec-07 85 184 260 390 763 93826-Dec-08 893 2963 4013 4775 7170 791525-Dec-09 563 2030 3545 4845 6500 700031-Dec-10 243 775 2710 3450 9685 10000

28-May-10 395 1577 3500 4500 7372 900025-Jun-10 375 1650 3500 4500 7308 900030-Jul-10 343 1565 3500 4500 7029 900027-Aug-10 328 1500 3500 4500 10000 1000024-Sep-10 310 1250 3175 4425 8300 950029-Oct-10 300 1095 3005 4163 8150 925026-Nov-10 280 970 2880 3990 8150 925031-Dec-10 243 775 2710 3450 9685 1000028-Jan-11 208 555 2003 3043 7155 1475025-Feb-11 185 468 1305 1865 4700 702525-Mar-11 209 625 1190 2003 4345 625029-Apr-11 146 520 1275 2165 5000 712027-May-11 172 618 1223 2058 4108 5215

-224 -960 -2278 -2443 -3265 -3785


Change in Spread May-10 to May-11



RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOK SERVICING

5. Commercial/Multifamily Mortgage Servicing Volumes Year-End 2010 The Mortgage Bankers Association (MBA) today released its year-end ranking of commercial and multifamily mortgage servicers as of the end of December 31, 2010. On top of the list of firms is Wells Fargo with $451.1 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $337.4 billion, Berkadia Commercial Mortgage with $194.9 billion, Bank of America Merrill Lynch with $126.6 billion, and KeyBank Real Estate Capital with $118.9 billion. Specific breakouts include: • Total U.S. Master and Primary

Servicing Volume • U.S. Commercial Mortgage-backed

Securities (CMBS), Collateralized Debt Obligations (CDOs) and Other Asset-Backed Securities (ABS) Master and Primary Servicing Volume

• U.S. Commercial Banks and Savings Institution Volume

• U.S. Credit Company, Pension Funds, REITs, and Investment Funds Volume

• Fannie Mae and Freddie Mac Servicing Volume

• Federal Housing Administration (FHA) Servicing Volume

• U.S. Life Company Servicing Volume • U.S. Warehouse Volume • U.S. Other Investor Volume • U.S. CMBS Named Special Servicing

Volume • Total Non-U.S. Master and Primary

Servicing Volume A primary servicer is generally responsible for collecting loan payments from borrowers, performing property inspections and other property-related activities. A master servicer is typically responsible for collecting cash and data from primary

servicers and then providing that cash and data, through trustees, to investors. Unless otherwise noted, MBA tabulations that combine different roles do not double-count loans for which a single servicer performs multiple roles. Wells Fargo, PNC/Midland, Berkadia, Bank of America Merrill Lynch and KeyBank are the largest master and primary servicers of commercial/multifamily loans in U.S. CMBS, CDO and other ABS; , PNC/Midland, GEMSA Loan Services, Prudential Asset Resources, Northwestern Mutual, and Northmarq Capital are the largest servicers for life companies; PNC/Midland, Wells Fargo, Berkadia, Deutsche Bank Commercial Real Estate and Prudential Asset Resources are the largest Fannie Mae/Freddie Mac servicers. PNC/Midland ranks as the top master and primary servicer of commercial bank and savings institution loans; GEMSA the top credit company, pension funds, REITs, and investment funds servicer; PNC/Midland the top FHA and Ginnie Mae servicer; Wells Fargo the top for mortgages in warehouse facilities; and Berkadia the top for other investor type loans. MBA also asked firms to provide information about CMBS loans on which they are the "named special servicer" – that is, where the firm stands ready to service the loan should special problems develop, such as delinquency. The leading named special servicers were LNR Partners, Inc., CWCapital LLC & CWCapital Asset Management, C-III Asset Management LLC, PNC/Midland, and Berkadia. The MBA survey also collected servicing volumes for loans on commercial/multifamily properties located




outside the United States. Hatfield Philips International, an LNR Property Company ranks as the largest master and primary servicer of non-U.S. commercial/multifamily mortgages, followed by, Deutsche Bank, PNC/Midland, GEMSA, and Manulife Financial/John Hancock.




Rank CompanyAmount

($ millions)Numberof loans

Year-End Survey of Commercial/Multifamily Mortgage Servicing Volumes

Total Primary & Master Servicing

TOTAL

Total US Collateral

as of December 31, 2010

Avg. Loan Size ($m)

Wells Fargo1 39,125$451,089 $11.5

PNC Real Estate / Midland Loan Services2 79,720$337,367 $4.2

Berkadia Commercial Mortgage LLC3 26,119$194,930 $7.5

Bank of America Merrill Lynch4 10,789$126,627 $11.7

KeyBank Real Estate Capital5 11,462$118,882 $10.4

GEMSA Loan Services LP6 11,036$102,312 $9.3

Prudential Asset Resources7 5,794$65,073 $11.2

Deutsche Bank Commercial Real Estate8 2,597$52,263 $20.1

NorthMarq Capital9 5,470$38,552 $7.0

TriMont Real Estate Advisors10 1,365$28,385 $20.8

Principal Global Investors11 2,908$25,058 $8.6

HFF L. P.12 2,018$25,050 $12.4

Grandbridge Real Estate Capital, LLC13 5,076$24,268 $4.8

Northwestern Mutual14 625$21,494 $34.4

C-III Asset Management LLC15 1,976$19,363 $9.8

Manulife Financial / John Hancock 16 1,510$16,087 $10.7

New York Life Investments17 596$15,816 $26.5

Q10 Capital LLC18 4,831$14,870 $3.1

Walker & Dunlop, LLC19 1,680$14,653 $8.7

Red Mortgage Capital, LLC20 1,512$13,539 $9.0

HSBC Bank USA, N.A.21 1,831$12,763 $7.0

CWCapital LLC & CWCapital Asset Management22 1,268$12,665 $10.0

AEGON USA Reality Advisors, LLC23 1,490$11,889 $8.0

Nationwide Life Insurance Company24 1,447$9,887 $6.8

ING Investment Management, LLC25 1,228$9,011 $7.3

Centerline Capital Group26 1,371$8,768 $6.4

Greystone Servicing Corporation, Inc.27 2,270$8,737 $3.8

M&T Realty Capital Corporation28 1,018$8,348 $8.2

Situs Serv LP DBA Situs Asset Management LLC29 3,554$8,298 $2.3

Pacific Life Insurance Company30 518$8,266 $16.0

Thrivent Financial for Lutherans31 3,300$7,470 $2.3

Oak Grove Capital32 1,219$7,228 $5.9

The Lincoln National Life Insurance Company33 1,258$6,773 $5.4

NCB, FSB34 4,328$5,802 $1.3

Newmark Realty Capital, Inc. - SAM Member35 757$5,305 $7.0

Cohen Financial36 2,472$4,972 $2.0

Essex Financial Services, LLC37 1,034$4,199 $4.1

Pacific Southwest Realty Services - SAM Member38 800$4,189 $5.2

The Bank of New York Mellon - Asset Solutions Division39 717$4,042 $5.6

Columbia National Real Estate Finance, LLC40 369$3,869 $10.5

Bellwether Real Estate Capital LLC41 862$3,568 $4.1

AmeriSphere Multifamily Finance, LLC42 300$2,620 $8.7

RiverSource Life Insurance Company43 818$2,506 $3.1

Heartland Bank44 603$2,494 $4.1




Rank CompanyAmount




TOTAL

Total US Collateral


Avg. Loan Size ($m)

Barry S. Slatt Mortgage Company45 905$2,077 $2.3

P/R Mortgage & Investment Corp.46 491$2,042 $4.2

4086 Mortgage Capital, Inc.47 441$2,004 $4.5

Primary Capital Advisors48 154$1,937 $12.6

Capital Funding, LLC (formerly Capital Funding Group, Inc.)49 287$1,892 $6.6

Bernard Financial Servicing Group - SAM Member50 264$1,719 $6.5

Norris, Beggs & Simpson51 357$1,649 $4.6

Dougherty Funding LLC52 123$1,583 $12.9

OneAmerica Financial Partners53 551$1,542 $2.8

Lancaster Pollard Mortgage Company54 356$1,526 $4.3

Sunrise Mortgage & Investment Co.55 937$1,378 $1.5

HomeStreet Capital56 360$1,350 $3.7

Colliers Meredith & Grew - SAM Member57 99$1,200 $12.1

Waterstone Asset Management58 177$1,150 $6.5

Johnson Capital Group59 158$1,138 $7.2

Medalist Capital60 253$1,115 $4.4

Capital Advisors, Inc.61 306$1,102 $3.6

Gershman Mortgage62 153$1,042 $6.8

Glacier Real Estate Finance63 297$1,035 $3.5

RockBridge Capital LLC64 92$1,034 $11.2

Protective Life Corp65 295$935 $3.2

Thomas D. Wood and Company - SAM Member66 404$845 $2.1

Goedecke & Co., LLC67 132$817 $6.2

Morris, Smith and Feyh, Incorporated68 166$811 $4.9

Allianz Real Estate of America69 26$770 $29.6

Westcap Corp.70 187$769 $4.1

George Elkins Mortgage Banking Company71 419$763 $1.8

Pace Financial Group72 70$699 $10.0

Dougherty Mortgage LLC73 77$598 $7.8

Venture Mortgage Corporation74 236$584 $2.5

Century Health Capital, Inc.75 60$558 $9.3

Litton Loan Servicing76 1,525$492 $0.3

Dickinson, Logan, Todd & Barber, Inc. - SAM Member77 126$438 $3.5

Terrix Financial Corporation78 243$368 $1.5

Summit Investment Partners79 298$354 $1.2

Innovative Capital Advisors, LLC80 225$284 $1.3

Eustis Commercial Mortgage Corporation - SAM Member81 73$280 $3.8

Western Capital Realty Advisors - SAM Member82 51$256 $5.0

Metropolitan Funding Corp.83 3$253 $84.4

First Housing Development Corporation of Florida84 63$246 $3.9

Directed Capital85 153$188 $1.2

Great-West Life & Anuity Insurance Company86 44$147 $3.3

Boston Mutual Life Insurance Company87 153$133 $0.9

Ziegler Financing Corporation88 10$107 $10.7




Rank CompanyAmount




TOTAL

Total US Collateral


Avg. Loan Size ($m)

Welsh Capital, LLC - SAM Member89 34$42 $1.2

Resurgent Capital Services90 481$38 $0.1

Allstate Investments, LLC91 11$23 $2.1

Bridgelock Capital DBA (BLC SERVICING)92 5$4 $0.8

Minnesota Life Insurance Company93 6$4 $0.7




Rank CompanyAmount




CMBS, CDO or other ABS

Total US Collateral


Avg. Loan Size ($m)

Wells Fargo1 28,733$368,024 $12.8








HFF L. P.9 564$7,827 $13.9

NorthMarq Capital10 805$6,962 $8.6

Grandbridge Real Estate Capital, LLC11 774$4,486 $5.8


CWCapital LLC & CWCapital Asset Management13 400$3,841 $9.6

NCB, FSB14 1,221$2,709 $2.2

Deutsche Bank Commercial Real Estate15 164$2,189 $13.3

Situs Serv LP DBA Situs Asset Management LLC16 267$2,109 $7.9

Nationwide Life Insurance Company17 220$1,994 $9.1

C-III Asset Management LLC18 113$1,851 $16.4


Q10 Capital LLC20 138$1,175 $8.5

Bernard Financial Servicing Group - SAM Member21 108$1,168 $10.8

Waterstone Asset Management22 135$1,113 $8.2




Manulife Financial / John Hancock 26 121$863 $7.1

Cohen Financial27 275$812 $3.0

Columbia National Real Estate Finance, LLC28 80$804 $10.0

AEGON USA Reality Advisors, LLC29 14$498 $35.6

TriMont Real Estate Advisors30 5$404 $80.7

Walker & Dunlop, LLC31 32$392 $12.3

Litton Loan Servicing32 1,164$389 $0.3

Summit Investment Partners33 298$354 $1.2


New York Life Investments35 1$191 $191.0

Johnson Capital Group36 25$177 $7.1

Goedecke & Co., LLC37 18$172 $9.6

Bellwether Real Estate Capital LLC38 13$128 $9.8





Glacier Real Estate Finance43 12$59 $5.0

Primary Capital Advisors44 4$42 $10.5




Rank CompanyAmount





Total US Collateral


Avg. Loan Size ($m)

HSBC Bank USA, N.A.45 2$39 $19.3

Norris, Beggs & Simpson46 3$23 $7.6


Colliers Meredith & Grew - SAM Member48 4$14 $3.5





Rank CompanyAmount




Commercial Bank/Savings Institution

Total US Collateral


Avg. Loan Size ($m)


TriMont Real Estate Advisors2 898$26,065 $29.0



HSBC Bank USA, N.A.5 1,500$9,451 $6.3

Berkadia Commercial Mortgage LLC6 233$3,166 $13.6


Situs Serv LP DBA Situs Asset Management LLC8 2,207$2,099 $1.0

Dougherty Funding LLC9 123$1,583 $12.9

HFF L. P.10 19$884 $46.5

NCB, FSB11 2,043$702 $0.3

Principal Global Investors12 95$549 $5.8

HomeStreet Capital13 101$500 $5.0


Grandbridge Real Estate Capital, LLC15 48$261 $5.4

Wells Fargo16 19$194 $10.1

RockBridge Capital LLC17 10$145 $14.5

P/R Mortgage & Investment Corp.18 55$129 $2.3

GEMSA Loan Services LP19 21$126 $6.0

Heartland Bank20 13$50 $3.8

Waterstone Asset Management21 42$37 $0.9

Q10 Capital LLC22 4$7 $1.8

Pacific Southwest Realty Services - SAM Member23 2$3 $1.5


Primary Capital Advisors25 1$1 $1.0

Centerline Capital Group26 2$0 $0.2




Rank CompanyAmount




Credit Company, Pension Funds, REITs, Investment Funds

Total US Collateral


Avg. Loan Size ($m)


PNC Real Estate / Midland Loan Services2 718$11,861 $16.5

C-III Asset Management LLC3 530$8,945 $16.9

Prudential Asset Resources4 551$3,928 $7.1


Cohen Financial6 1,710$1,900 $1.1

NorthMarq Capital7 110$1,494 $13.6

CWCapital LLC & CWCapital Asset Management8 32$904 $28.3


HFF L. P.10 80$510 $6.4

Wells Fargo11 153$374 $2.5



Q10 Capital LLC14 73$255 $3.5

Directed Capital15 153$188 $1.2


KeyBank Real Estate Capital17 45$56 $1.2






Rank CompanyAmount




Fannie Mae & Freddie Mac

Total US Collateral


Avg. Loan Size ($m)


Wells Fargo2 7,808$46,632 $6.0


Deutsche Bank Commercial Real Estate4 2,030$26,429 $13.0


GEMSA Loan Services LP6 951$13,954 $14.7

Walker & Dunlop, LLC7 1,374$11,928 $8.7


Red Mortgage Capital, LLC9 956$10,622 $11.1


Centerline Capital Group11 1,311$8,464 $6.5


M&T Realty Capital Corporation13 934$7,685 $8.2

Greystone Servicing Corporation, Inc.14 2,057$6,818 $3.3

Oak Grove Capital15 1,014$5,943 $5.9


KeyBank Real Estate Capital17 494$5,217 $10.6

HSBC Bank USA, N.A.18 329$3,273 $9.9

HFF L. P.19 184$3,198 $17.4

NCB, FSB20 1,056$2,371 $2.2

AmeriSphere Multifamily Finance, LLC21 276$2,360 $8.6

Primary Capital Advisors22 149$1,894 $12.7



Bank of America Merrill Lynch25 304$723 $2.4


Q10 Capital LLC27 23$168 $7.3




Bernard Financial Servicing Group - SAM Member31 7$65 $9.3


Lancaster Pollard Mortgage Company33 3$24 $8.1


The Lincoln National Life Insurance Company35 5$8 $1.5

Manulife Financial / John Hancock 36 1$1 $1.0





Rank CompanyAmount




FHA & Ginnie Mae

Total US Collateral


Avg. Loan Size ($m)




Wells Fargo4 1,283$6,727 $5.2

Red Mortgage Capital, LLC5 548$2,860 $5.2

Heartland Bank6 590$2,444 $4.1



Capital Funding, LLC (formerly Capital Funding Group, Inc.)9 270$1,644 $6.1

P/R Mortgage & Investment Corp.10 348$1,606 $4.6

Lancaster Pollard Mortgage Company11 303$1,414 $4.7


Oak Grove Capital13 195$1,209 $6.2

Gershman Mortgage14 153$1,042 $6.8

Greystone Servicing Corporation, Inc.15 124$982 $7.9


M&T Realty Capital Corporation17 69$631 $9.1

Century Health Capital, Inc.18 60$558 $9.3


Grandbridge Real Estate Capital, LLC20 101$413 $4.1

NorthMarq Capital21 25$273 $10.9

AmeriSphere Multifamily Finance, LLC22 24$260 $10.8

Metropolitan Funding Corp.23 3$253 $84.4





Ziegler Financing Corporation28 10$107 $10.7



NCB, FSB31 2$6 $3.1

Q10 Capital LLC32 2$4 $2.0





Rank CompanyAmount




Life Insurance Companies

Total US Collateral


Avg. Loan Size ($m)




Northwestern Mutual4 625$21,494 $34.4


New York Life Investments6 589$15,285 $26.0


Q10 Capital LLC8 4,371$13,067 $3.0

HFF L. P.9 1,171$12,631 $10.8


AEGON USA Reality Advisors, LLC11 1,386$10,521 $7.6

Grandbridge Real Estate Capital, LLC12 2,817$9,728 $3.5

ING Investment Management, LLC13 1,228$9,011 $7.3

Nationwide Life Insurance Company14 1,227$7,893 $6.4


Thrivent Financial for Lutherans16 3,300$7,470 $2.3

The Lincoln National Life Insurance Company17 1,253$6,766 $5.4



Essex Financial Services, LLC20 1,034$4,199 $4.1



Bellwether Real Estate Capital LLC23 698$2,720 $3.9

RiverSource Life Insurance Company24 818$2,506 $3.1

Cohen Financial25 458$2,097 $4.6

Barry S. Slatt Mortgage Company26 892$2,049 $2.3

4086 Mortgage Capital, Inc.27 441$2,004 $4.5

Norris, Beggs & Simpson28 354$1,627 $4.6

Columbia National Real Estate Finance, LLC29 132$1,560 $11.8

OneAmerica Financial Partners30 551$1,542 $2.8


Walker & Dunlop, LLC32 149$1,479 $9.9

Sunrise Mortgage & Investment Co.33 937$1,378 $1.5

Colliers Meredith & Grew - SAM Member34 95$1,186 $12.5


Medalist Capital36 253$1,115 $4.4

Capital Advisors, Inc.37 306$1,102 $3.6

Glacier Real Estate Finance38 285$975 $3.4


Thomas D. Wood and Company - SAM Member40 404$845 $2.1


Allianz Real Estate of America42 26$770 $29.6

Westcap Corp.43 187$769 $4.1





Rank CompanyAmount




Life Insurance Companies

Total US Collateral


Avg. Loan Size ($m)

KeyBank Real Estate Capital45 146$673 $4.6


Goedecke & Co., LLC47 114$645 $5.7



Dickinson, Logan, Todd & Barber, Inc. - SAM Member50 126$438 $3.5


Terrix Financial Corporation52 243$368 $1.5

Innovative Capital Advisors, LLC53 225$284 $1.3



Great-West Life & Anuity Insurance Company56 44$147 $3.3

Boston Mutual Life Insurance Company57 153$133 $0.9



Wells Fargo60 5$26 $5.2

Allstate Investments, LLC61 11$23 $2.1

Minnesota Life Insurance Company62 6$4 $0.7

NCB, FSB63 1$1 $1.0




Rank CompanyAmount




Warehouse (not elsewhere classified)

Total US Collateral


Avg. Loan Size ($m)

Wells Fargo1 1,108$28,390 $25.6

PNC Real Estate / Midland Loan Services2 335$9,415 $28.1


Bank of America Merrill Lynch4 70$3,236 $46.2


Prudential Asset Resources6 91$985 $10.9

CWCapital LLC & CWCapital Asset Management7 12$174 $14.5

Q10 Capital LLC8 95$144 $1.5


GEMSA Loan Services LP10 9$115 $12.8

Berkadia Commercial Mortgage LLC11 7$111 $15.9

Lancaster Pollard Mortgage Company12 50$88 $1.8


Oak Grove Capital14 10$76 $7.6

C-III Asset Management LLC15 19$75 $3.9




Pacific Life Insurance Company19 27$33 $1.2

Litton Loan Servicing20 154$32 $0.2

Barry S. Slatt Mortgage Company21 13$27 $2.1


NCB, FSB23 5$13 $2.5


Bridgelock Capital DBA (BLC SERVICING)25 5$4 $0.8

Situs Serv LP DBA Situs Asset Management LLC26 12$3 $0.3




Rank CompanyAmount




Other

Total US Collateral


Avg. Loan Size ($m)





Greystone Servicing Corporation, Inc.5 89$936 $10.5

AEGON USA Reality Advisors, LLC6 90$870 $9.7

Wells Fargo7 16$723 $44.0


Capital Funding, LLC (formerly Capital Funding Group, Inc.)9 17$248 $14.6




Red Mortgage Capital, LLC13 8$58 $7.3


Q10 Capital LLC15 125$50 $0.4

M&T Realty Capital Corporation16 15$32 $2.1







Rank CompanyAmount



Total Named Special Servicing


Total US Collateral


Avg. Loan Size ($m)

LNR Partners, Inc (U.S.)1 15,015$201,348 $13.4

CWCapital LLC & CWCapital Asset Management2 11,788$150,469 $12.8




Wells Fargo6 1,052$22,601 $21.5



ORIX Capital Markets, LLC9 1,329$8,339 $6.3


NCB, FSB11 1,118$2,370 $2.1












Rank CompanyAmount




TOTAL

C/MF Loans Secured by Collateral OUTSIDE the US


Avg. Loan Size ($m)

Hatfield Phillips International, an LNR Property Company1 194$28,756 $148.2



GEMSA Loan Services LP4 565$9,649 $17.1


Capital Services Group6 3,941$4,238 $1.1


LNR Partners Germany, an LNR Property Company8 543$1,022 $1.9




Prudential Asset Resources12 12$334 $27.9

The Bank of New York Mellon - Asset Solutions Division13 30$78 $2.6



RELEASESSERVICINGOUTSTANDINGPRODUCTIONENVIRONMENTOUTLOOK RELEASES

6. Recent Commercial/Multifamily Research Releases from MBA

The following reports can be found at www.mortgagebankers.org/research. If you have trouble locating these or other MBA reports, email [email protected]

Commercial/Multifamily Mortgage Debt Outstanding Flat in Q1; Five of Seven Top Investor Groups Increase Holdings, Bank and Finance Company Holdings DeclineThe level of commercial/multifamily mortgage debt outstanding remained essentially unchanged at $2.4 trillion in the first quarter of 2011, decreasing by 0.1 percent from fourth quarter 2010, according to the Mortgage Bankers Association's (MBA) analysis of the Federal Reserve Board Flow of Funds data

6/16/2011

Commercial/Multifamily Mortgage Delinquency Rates Mixed in First QuarterDelinquency rates among different commercial/multifamily mortgage investor groups were mixed in the first quarter of 2011, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

6/8/2011

Commercial/Multifamily Mortgage Bankers’ First Quarter 2011 Originations Increase 89 Percent Over First QuarterFirst quarter 2011 commercial and multifamily mortgage originations were 89 percent higher than during the same period last year and 25 percent lower than during the fourth quarter of 2010, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The decrease from fourth quarter 2010 reflects the industry's usual push to finalize deals before the end of the year, and subsequent drop-offs in first quarter numbers.

5/5/2011

Mortgage Bankers' Commercial/Multifamily Originations Up 44 Percent to $118.8 Billion in 2010Commercial and multifamily mortgage origination volumes increased 44 percent in 2010 over the previous year, with mortgage bankers reporting $118.8 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association's 2010 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.

4/25/2011




MBA Releases 2010 Commercial/Multifamily Originations RankingsWells Fargo Bank was the top commercial/multifamily mortgage originator in 2010, according to a set of listings released today by the Mortgage Bankers Association (MBA). Other originators in the top 10 include HFF, L.P.; Meridian Capital Group, LLC.; CBRE Capital Markets, Inc.; Prudential Mortgage Capital Company; MetLife Real Estate Investments; Deutsche Bank Commercial Real Estate; PNC Real Estate; Northmarq Capital, LLC; and Berkadia Commercial Mortgage LLC.

4/5/2011

Commercial/Multifamily Mortgage Debt Outstanding Fell by $67 billion, 2.7 Percent in 2010, Driven by CMBS DeclinesThe level of commercial/multifamily mortgage debt outstanding decreased by 0.5 percent in the fourth quarter of 2010, to $2.4 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. On a year-over-year basis, the amount of mortgage debt outstanding at the end of 2010 was $67 billion lower than at the end of 2009, a decline of 2.7 percent.

3/17/2011

MBA: Commercial and Multifamily Mortgage Delinquency Rates Remain Low for Life Companies, Fannie and Freddie; Fall for Banks/Thrifts; Rise Slightly for CMBS in Fourth QuarterDuring the fourth quarter of 2010, commercial and multifamily mortgage delinquency rates remained low for life insurance companies, Fannie Mae and Freddie Mac; fell for banks and thrifts for the first time since the 2006 and rose slightly for loans held in commercial mortgage backed securities (CMBS), according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report.

3/3/2011

MBA: Strong Fourth Quarter Drives 2010 Commercial/Multifamily Mortgage Bankers Originations 36 Percent Above 2009 LevelsMortgage bankers originated $110 billion of commercial and multifamily mortgages during 2010 – an increase of 36 percent from 2009, according to preliminary estimates based on the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

2/7/2011

MBA: Only 11 Percent of $1.4 trillion of Non-Bank Commercial/Multifamily Mortgage Debt Set to Mature in 2011Of the $1.4 trillion balance of outstanding commercial/multifamily mortgages held by non-bank investors, only 11 percent of the total ($155 billion) will mature in 2011 and 9 percent ($125 billion) in 2012 according to today’s release of the Mortgage Bankers Association’s (MBA) 2010 Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes. The survey found that maturities vary considerably by the type of investor holding the loan.

2/7/2011




Wells Fargo/Wachovia, PNC/Midland and Berkadia Lead National Rankings of Commercial/Multifamily Servicing VolumesThe Mortgage Bankers Association (MBA) today released its year-end ranking of commercial and multifamily mortgage servicers as of the end of December 31, 2010. On top of the list of firms is Wells Fargo with $451.1 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $337.4 billion, Berkadia Commercial Mortgage with $194.9 billion, Bank of America Merrill Lynch with $126.6 billion, and KeyBank Real Estate Capital with $118.9 billion.

2/6/2011

MBA's Woodwell Testifies on Commercial Real Estate MarketJamie Woodwell, Vice President of Commercial/Multifamily Research for the Mortgage Bankers Association (MBA), testified today before the Congressional Oversight Panel at a hearing titled, "Commercial Real Estate's Impact on Bank Stability."

2/4/2011

Encouraging Signs of Stronger GrowthData becoming available over the past month or two have provided encouraging signs of somewhat stronger growth in real economic activity. The most heartening developments have been in consumer spending, which rose at a 2.8% annual rate in third quarter and appears to be on track to equal that gain in the current quarter.

12/17/2010

Commercial/Multifamily Mortgage Debt Outstanding Down 1.3 Percent on Bank and CMBS Balances in 3Q 2010The level of commercial/multifamily mortgage debt outstanding decreased in the third quarter, to $3.2 trillion, according to the Mortgage Bankers Associations (MBA) analysis of the Federal Reserve Board Flow of Funds data.

12/15/2010

Commercial and Multifamily Mortgage Delinquency Rates Mixed in Third QuarterDelinquency rates for different commercial/multifamily mortgage investor groups were mixed in the third quarter, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report. The delinquency rate for loans held in CMBS is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990's, some by large margins.

12/1/2010

Commercial Mortgage Originations Continue to Rise in Third QuarterThird quarter 2010 commercial and multifamily mortgage loan originations were 32 percent higher than during the same period last year and 15 percent higher than during the second quarter, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

11/4/2010




All Eyes on the FedSome of the economic statistics becoming available during the past month have been relatively encouraging. Key components of new orders for durable goods—the total excluding transportation equipment, and orders for nondefense capital goods other than aircraft—turned up in August, and data for previous months were revised higher. The ISM index for nonmanufacturing, the sector where most jobs are created, rose in September. The August rise in consumer spending was modest, but larger than expected. And initial claims for unemployment insurance have fallen in the past seven weeks to the lowest level since late March.

10/26/2010

MBA Reports 40 Percent Decline in Multifamily Borrowing in 2009 Among Diverse Lenders and Loan Sizes In 2009, 2,725 different multifamily lenders provided a total of $52.5 billion in new financing for apartment buildings with five or more units, according to the Mortgage Bankers Association’s (MBA) Annual Report on Multifamily Lending for 2009. The 2009 dollar volume represents a 40 percent decline from 2008 levels. The most active 122 lenders represented just four percent of active lenders, but 77 percent of the dollar volume lent. Three-quarters of the active lenders made five or fewer loans over the course of the year.

10/14/2010

MBA Analysis: Commercial and Multifamily Mortgage Debt Outstanding Declined $52 Billion or 1.6 Percent in 2Q 2010The level of commercial/multifamily mortgage debt outstanding decreased in the second quarter, to $3.24 trillion, according to the Mortgage Bankers Association’s (MBA) analysis of the Federal Reserve Board Flow of Funds data.

9/23/2010

Slow Growth AheadData releases over the past month leave no doubt that economic growth has slowed to a snail’s pace. Second quarter GDP growth was revised down to a 1.6% annual rate. Orders for durable goods other than transportation equipment fell sharply, and included an abrupt decline in a critical component—orders for nondefense capital goods other than aircraft. Existing home sales plummeted, falling to the lowest level since the series began in 1999, and the ISM index for non-manufacturing registered an unexpected decline in August.

9/10/2010

MBA: Commercial Delinquencies Up for CMBS, Flat for Banks in Second QuarterDelinquency rates were mixed in the second quarter for commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

9/2/2010




Wells Fargo Tops U.S. Commercial/Multifamily Servicers in MBA Mid-Year Rankings ReportThe Mortgage Bankers Association (MBA) today released its mid-year ranking of commercial and multifamily mortgage servicers as of the end of June 30, 2010. Topping the list of firms is Wells Fargo with $462.8 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $307.9 billion, Berkadia Commercial Mortgage with $202.6 billion, Bank of America Merrill Lynch with $133.4 billion and KeyBank Real Estate Capital with $124.7 billion.

8/24/2010

MBA: Second Quarter 2010 Commercial/Multifamily Mortgage Originations Increase Over First Quarter, But Remain Flat Over Last YearSecond quarter 2010 commercial and multifamily mortgage loan originations were one percent higher than during the same period last year and 35 percent higher than during the first quarter, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

7/28/2010

Slower Growth AheadIncoming data over the past month or two have made for sobering reading. Data from the housing industry have revealed huge declines in housing sales and starts, building permits, and applications for loans to purchase homes. While some post tax credit slump was to be expected, more was borrowed from the future than had been bargained for. The manufacturing industry, which earlier had been growing rapidly, is cooling off—the ISM index for that industry fell in June. Consumers have lost confidence, and car sales have tailed off. Reports from abroad indicate a slowdown in the rate of growth in industrial activity.

7/14/2010

MBA Analysis: Commercial and Multifamily Mortgage Debt Outstanding Declined 0.9 Percent in First Quarter 2010The level of commercial/multifamily mortgage debt outstanding decreased in the first quarter, to $3.31 trillion, according to the Mortgage Bankers Association’s (MBA) analysis of the Federal Reserve Board Flow of Funds data.

6/22/2010

MBA Report Shows Economic Weakness Continues to Weigh on Commercial Mortgage PerformanceDelinquency rates continued to increase in the first quarter for all commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. The delinquency rate for loans held in CMBS is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990’s, some by large margins.

6/16/2010




European Debt Crisis: Drag on U.S. GrowthA month ago, the developing European debt crisis was a cloud on the economic horizon. During the past few weeks, rain has begun to fall.

6/11/2010

MBA Study: First Quarter 2010 Commercial/Multifamily Mortgage Originations Increase from Year Earlier, Though Levels Remain LowFirst quarter 2010 commercial and multifamily mortgage loan originations were 12 percent higher than during the same period last year and 26 percent lower than during the fourth quarter of 2009, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

5/18/2010

A New Question Mark on the HorizonThe performance of the U.S. economy since the middle of last year has exceeded most forecasters’ expectations. Led by sharply rising inventory investment, the economy has rebounded from the deepest recession of the postwar period to record an average annualized growth rate of 3.7% during the past three quarters. The resurgence of the manufacturing sector has been particularly notable; since the trough in June of last year, manufacturing output has risen at an annual rate of 9%. While weak employment growth and moderating wage rates have depressed aggregate real wage income, consumer spending adjusted for inflation has nonetheless strengthened, rising in the first quarter at an annual rate of 3.6%, although much of that increase was due to a jump in spending on durable goods. Business investment in equipment and software has also contributed importantly to growth, and orders for nondefense capital goods point to continuing gains in the months immediately ahead.

5/12/2010

Mortgage Bankers’ Commercial/Multifamily Originations Down 46 Percent in 2009Commercial and multifamily mortgage origination volumes decreased 46 percent in 2009 among repeat reporters, with mortgage bankers reporting $82.3 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association’s 2009 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.

4/22/2010




Will Long-Term Interest Rates Remain Low?Fourth quarter real GDP growth was revised down a bit to a 5.6% annual rate, a revision too small to be significant. Data coming in during the past month suggest a real GDP growth rate of around 3% or a little less in the first quarter of 2010, well below the fourth quarter pace. Consumer spending appears to have risen a bit above a 3% annual rate—a surprisingly strong performance given little or no increase in real disposable income during the quarter. Federal consumption and investment also appears to have strengthened appreciably from its pace late last year. But inventory investment and business investment in equipment and software will make smaller contributions to economic expansion in the first three months of this year than they did in the prior quarter. Residential investment probably declined in the first quarter, given the recent monthly pattern of residential construction.

4/12/2010

Wells Fargo Was Top U.S. Commercial/Multifamily Originator in 2009 According to MBAWells Fargo Bank was the top commercial/multifamily originator in 2009, according to a set of listings released by the Mortgage Bankers Association (MBA). Other originators in the top 10 include PNC Real Estate; Deutsche Bank Commercial Real Estate; CBRE Capital Markets, Inc.; HFF L.P.; Prudential Mortgage Capital Company; Meridian Capital Group; MetLife; Northmarq Capital LLC and Capmark Financial Group Inc.

4/7/2010

MBA Analysis: Commercial and Multifamily Mortgage Debt Outstanding Declined 2.8 Percent in 2009The level of commercial/multifamily mortgage debt outstanding decreased by 1.7 percent in the fourth quarter, to $3.4 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. On a year-over-year basis, the amount of mortgage debt outstanding at the end of 2009 was $99 billion lower than at the end of 2008, a decline of 2.8 percent.

3/18/2010

A Handoff to Final SalesInventory investment is typically a strong contributor to economic growth early in a recovery from recession. The current recovery is no exception. During the latter half of last year, real GDP grew at an annual rate of 4.0%; inventory investment accounted for more than half of that increase. That component of GDP has further to go before reaching its typical share of GDP—about 0.4%--but it is now two-thirds of the way along that path. Most of the thrust from inventory investment will probably be over by midyear, when the effects of the fiscal stimulus program adopted last year will be waning. Maintaining a pace of growth sufficient to create jobs on a scale that will reduce unemployment will therefore require private final sales to step up.

3/15/2010




MBA Report Shows Economic Fallout Continues to Impact Commercial Real Estate Markets/Delinquencies in 4th Quarter 2009Delinquency rates continued to increase in the fourth quarter for most commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

3/11/2010

MBA Analysis Shows Commercial/Multifamily Mortgage Performance Remains Stronger Than Overall Bank/Thrift Loan PortfoliosToday the Mortgage Bankers Association (MBA) released its most recent Commercial/Multifamily Research DataNote, which examines the performance of loans and leases held by banks and thrifts as of the fourth quarter of 2009. The results show that commercial and multifamily mortgages continue to have the lowest charge-off rates of any loan type at banks and thrifts and have 30+ day delinquency rates lower than the overall portfolio of loans and leases held by these institutions.

3/9/2010

Federal Budget Deficits—A Threat to the Nation’s FutureThe 5.7% annual rate of increase in real GDP last quarter was the strongest in 6 years. Inventory investment contributed 3.4 percentage points to the expansion; inventories were still being drawn down during the quarter, but at a much less rapid rate. But the quarter wasn’t just about inventories; there were positive developments with regard to final sales. Business investment in equipment and software increased at a 13% annual rate, and exports increased even faster. Moreover, the 2% rise in spending by consumers was stronger than might have been expected, since it followed a quarter in which consumer outlays had been boosted by the cash for clunkers program and second quarter additions to disposable income from the stimulus package.

2/23/2010

MBA Study: Originations of Commercial and Multifamily Mortgages Increased in Fourth Quarter 2009Fourth quarter 2009 commercial and multifamily mortgage loan originations were 12 percent higher than during the same period last year and 15 percent higher than during the third quarter of 2009, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

2/2/2010

Wells Fargo/Wachovia, PNC/Midland and Berkadia Lead National Rankings of Commercial/Multifamily Servicing VolumesThe Mortgage Bankers Association (MBA) today released its year-end ranking of commercial and multifamily mortgage servicers as of the end of December 31, 2009. On top of the list of firms is Wells Fargo/Wachovia Bank with $473.8 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $322.9 billion, Berkadia Commercial Mortgage with $217.9 billion, Bank of America Merrill Lynch with $131.7 billion, KeyBank Real Estate Capital with $128.5 billion, and GEMSA Loan Services LP with $102.3 billion.

2/1/2010




Only 13 Percent of Non-Bank Commercial/Multifamily Mortgage Debt to Mature in 2010; Seven Percent in 2011The Mortgage Bankers Association (MBA) today released the results of its 2009 Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes. The survey indicates that the volume of commercial and multifamily mortgage debt maturing in 2010 and 2011 is relatively low. Of the $1.45 trillion balance of outstanding mortgages held by non-bank investors, only 13 percent of the total ($183.9 billion) will mature in 2010 and 7 percent ($99.8 billion) in 2011. The survey also found that maturities vary considerably by the type of investor holding the loan.

2/1/2010

Signs of Life in the EconomyEconomic growth appears to have picked up significantly in the final three months of 2009 from the subdued 2.2% annual rate of the third quarter. Fourth quarter GDP growth of roughly 4-1/2% seems in train. A larger increase in inventory investment is the main reason for stronger fourth quarter growth; final sales rose at about the same pace as in the prior three months, but with a different mix—a smaller contribution from consumer spending offset by an improved performance of net exports.

1/12/2010

About the Commercial Real Estate / Multifamily Finance DataBook

The Commercial Real Estate / Multifamily Finance DataBook is produced quarterly by the Research and Economics staff of the Mortgage Bankers Association and can be found at www.mortgagebankers.org/research. For more information, contact Jamie Woodwell, MBA’s Vice President of Commercial / Multifamily Research, at (202) 557-2936 or [email protected].

About the Mortgage Bankers Association

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s web site: www.mortgagebankers.org.

mba q1 2011 commercial/multifamily quarterly databook

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