Commercial/Multifamily Borrowing Up 9 Percent from Last Year

CONTACT
Ali Ahmad
aahmad@mba.org
(202) 557- 2727

WASHINGTON, D.C. (May 4, 2017) - According to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, first quarter 2017 commercial and multifamily mortgage loan originations increased 9 percent compared to the same period last year, and in line with the seasonality of market, first quarter originations were twenty-seven percent lower than the fourth quarter of 2016.

"Commercial real estate borrowing and lending started 2017 on much the same footing it ended 2016," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "Multifamily properties remain the key force behind overall originations trends, and the GSEs continue to drive multifamily originations.  Matching broader investment themes, financing backed by industrial properties also picked up, while retail declined."

FIRST QUARTER 2017 ORIGINATIONS UP 9 PERCENT COMPARED TO FIRST QUARTER 2016

A rise in originations for industrial, health care and multifamily properties led the overall increase in commercial/multifamily lending volumes when compared to the first quarter of 2016.  The first quarter saw a 40 percent year-over-year increase in the dollar volume of loans for industrial properties, a 22 percent increase for health care properties, a 14 percent increase for multifamily properties, a 2 percent increase for office properties, a 23 percent decrease in retail property loans, and a 40 percent decrease in hotel property loans.

Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) increased by 33 percent year-over-year.  Commercial bank portfolio loans increased 11 percent, life insurance companies loans were essentially flat from first quarter of last year, and loans originated for Commercial Mortgage Backed Securities (CMBS) loans decreased 17 percent.

FIRST QUARTER 2017 ORIGINATIONS DOWN TWENTY-SEVEN PERCENT FROM FOURTH QUARTER 2016

As is typical in comparisons of first quarter originations to fourth quarter originations, first quarter 2017 originations decreased 27 percent compared to the previous quarter. Among property types, hotel properties decreased 58 percent compared to the fourth quarter 2016, a 48 percent decrease in originations for retail properties, a 39 percent decrease for health care properties, a 37 percent decrease for industrial properties, a 29 percent decrease for multifamily properties, and a 26 percent decrease for office properties from the fourth quarter 2016.

Among investor types, between the fourth quarter 2016 and first quarter of 2017, the dollar volume of loans for CMBS decreased 40 percent, originations for GSEs decreased 29 percent, loans for life insurance companies decreased by 28 percent, and loans for commercial bank portfolios decreased 19 percent.

To view the report, please click here.