Commercial/Multifamily Borrowing Up 15 percent Year-over-Year

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

SAN DIEGO, CA (February 11, 2018)- Commercial and multifamily mortgage originations were up 15 percent for the full year 2017 over 2016, according to preliminary estimates from the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Data for the fourth quarter of 2017 shows a 9 percent increase in originations over the third quarter, and a 10 percent increase compared to the fourth quarter of 2016.

"Based on these preliminary numbers, 2017 was a record year for borrowing and lending backed by commercial real estate properties," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "The increase was driven by multifamily lending, particularly for Fannie Mae and Freddie Mac, coupled with overall growth in originations for commercial mortgage-backed securities and other capital sources.  Entering 2018, there continues to be strong interest to lend by just about every major capital source."

FOURTH QUARTER 2017 ORIGINATIONS UP 10 PERCENT COMPARED TO FOURTH QUARTER 2016

An increase in originations for hotel, multifamily, and office properties led the overall increase in commercial/multifamily lending volumes when compared to the fourth quarter of 2016.  The fourth quarter saw a 40 percent year-over-year increase in the dollar volume of loans for hotel properties, a 16 percent increase for multifamily properties, a seven percent increase for office properties, a 17 percent decrease for industrial properties, a 36 percent decrease in health care property loans, and a 40 percent decrease in retail property loans.

Among investor types, the dollar volume of loans originated for Commercial Mortgage Backed Securities (CMBS) increased by 27 percent year-over-year.  There was a 17 percent year-over-year increase for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) loans, a 4 percent decrease in life insurance company loans, and a 5 percent decrease in the dollar volume of commercial bank portfolio loans.

FOURTH QUARTER 2017 ORIGINATIONS UP 9 PERCENT FROM THIRD QUARTER 2017 Fourth quarter 2017 originations for hotel properties increased 31 percent compared to the third quarter 2017.  There was a 25 percent increase in originations for industrial properties, a 17 percent increase for multifamily properties, a 9 percent increase for office properties, a 21 percent decrease for retail properties, and a 28 percent decrease for health care properties from the third quarter 2017.

Among investor types, between the third and fourth quarter of 2017, the dollar volume of loans for life insurance companies increased 11 percent, loans for commercial bank portfolios increased 8 percent, originations for GSEs increased 4 percent, and loans for CMBS decreased by 6 percent.

PRELIMINARY 2017 ORIGINATIONS 15 PERCENT HIGHER THAN 2016

A preliminary measure of commercial and multifamily mortgage origination volumes shows 2017 originations 15 percent higher than during 2016. Compared to 2016, originations for hotel properties increased 26 percent. There was a 22 percent increase for industrial properties, a 17 percent increase for multifamily properties, a 12 percent increase for office properties, a 9 percent increase for health care properties, and a 21 percent decrease for retail properties.

Among investor types, 2017 versus 2016, loans for CMBS increased 43 percent, originations for GSEs increased 23 percent, loans for commercial bank portfolios decreased one percent and loans for life insurance companies decreased 2 percent in 2017 versus 2016.

In late March, MBA will release its Annual Origination Summation report for 2017 with final origination figures for the year.

To view the report, please visit: https://www.mba.org/Documents/Research/4Q17CMFOriginationsSurvey.pdf