With what it calls a “relatively robust supply of capital” hunting for the right real estate deal, the Mortgage Bankers Association (MBA) is projecting a 17 percent increase in commercial real estate loan originations this year to nearly $230 billion.

MBA economists also are expecting the volume of income property lending to increase steadily in the following three years, to $290 billion by 2015, they said at the group’s annual commercial real estate/multifamily housing convention in Atlanta.

In another favorable report, the association said concerns that a wave of commercial mortgage maturities would swamp the market have turned out to be overblown. Only 10 percent, or $150.6 billion in unpaid principal balances, of all income property loans held by nonbank lenders and investors is due in 2012, according to the MBA’s survey of loan maturity volumes.

Not only is 10 percent considered normal, said Jamie Woodwell, vice president of commercial real estate research at MBA, it represents a 3 percent decline from $154.7 billion in 2011 and an 18 percent decline from $184 billion in 2010.

But several other observers weren’t nearly as positive. Ann Hambly, founder and CEO of 1st Service Solutions, a borrower advocacy company based in Grapevine, Texas, said a wave of defaults is coming in commercial mortgage–backed securities (CMBS). And Carl Steck, a principal in MountainSeed Appraisal Management, an Atlanta-based firm that deals in the commercial real estate space, said property values are still falling.

Noting that CMBS investors booked $6 billion in real losses in 2011 and have already taken on $2 billion more in losses so far this year, Hambly told reporters in a private briefing that “it’s going to take a miracle” for many borrowers to refinance their deals when they come due between now and 2017.

Defaults are “far from over,” said Hambly, who ran the commercial servicing departments at Prudential, Bank of New York, Nomura, and Bank of America before moving to the other side of the table in 2005.

In an interview, Steck said that lenders holding acquisition, development, and construction loans to developers are still feeling “a lot of pain.” Single-family lot absorption is still going down, he noted, so developers “are struggling and will continue to struggle.”

The appraisal executive also said that lenders who are taking over the portfolios of failed institutions are finding that the values of the loans “are coming in a lot lower than they ever thought they would.” And as a result, he thinks a “fire sale” of commercial loans is just over the horizon.

The MBA’s loan origination projections are the first nonresidential lending volumes forecast by the association, which represents some 2,200 member companies that employ more than 280,000 people in all facets of real estate finance.

A more detailed report will be issued to members in the coming weeks, Woodwell said. But in the forecast released at the Atlanta conference, the MBA said that lending activity this year will vary among the various investor sectors, with insurance companies and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac continuing to lead the pack.

“Our forecast anticipates continued strength in lending by life companies and the GSEs [government-sponsored enterprises], increased lending by banks and others, and a slow but steady return in CMBS activity,” Woodwell told reporters.

The forecast breaks down lending activity by investor groups, but not by property type.

The MBA also said that income property loan originations were up 13 percent in the fourth quarter of 2011 compared with the same period a year earlier, and that commercial/multifamily lending was up 64 percent last year versus 2010.

Meanwhile, the group’s survey of loan maturity volumes, which covers $1.46 trillion worth of loans on income properties held or insured by life companies, Fannie Mae and Freddie Mac, the Federal Housing Administration (FHA), CMBS trusts, and other nonbank lenders, found that maturities vary significantly by investor group.

For example, just 4 percent of the outstanding balances of multifamily and health care mortgages held or guaranteed by Fannie, Freddie, Ginnie Mae, and the FHA—some $12.4 billion—is coming due this year. At the same time, 29 percent of the commercial mortgages held by credit companies and other investors—$46.6 billion—will mature in 2012.

Overall, though, the latest maturity survey and similar ones conducted since 2008 show that “the volume of commercial and multifamily mortgages maturing each year represents only a small portion of the commercial mortgage universe,” Woodwell said.

ULI–the Urban Land Institute