Commercial/Multifamily Borrowing Bounces Back in the Second Quarter of 2021

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Adam DeSanctis
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WASHINGTON, D.C. (August 12, 2021) - Commercial and multifamily mortgage loan originations were 106 percent higher in the second quarter of 2021 compared to a year ago and increased 66 percent from the first quarter of 2021, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

"Borrowing and lending tied to commercial and multifamily properties rebounded in the second quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Mortgage originations doubled compared to the second quarter of 2020, when loan demand cratered, and pandemic-related uncertainty made extending credit difficult. Even more notable is that compared to levels seen in 2019, a record year for originations, this year's second quarter showed a modest 1 percent increase."   

Woodwell added, "Significant differences still exist between property types. Originations of loans backed by industrial and multifamily properties hit second-quarter records, while retail and lodging loan volume remained muted."  

ORIGINATIONS INCREASE 106 PERCENT IN THE SECOND QUARTER OF 2021  

All property types showed an increase in the second quarter in commercial/multifamily lending volumes when compared to the second quarter of 2020. The second quarter saw a 327 percent year-over-year increase in the dollar volume of loans for industrial properties, a 302 percent increase for health care properties, a 234 percent increase for hotel properties, a 149 percent increase for office properties, a 88 percent increase for retail properties, and a 63 percent increase for multifamily property loan originations.  

Among investor types, the dollar volume of loans originated for Commercial Mortgage-Backed Securities (CMBS) increased by 1,913 percent year-over-year. There was a 144 percent increase for life insurance company loans, a 72 percent increase for commercial bank portfolio loans, and a 33 percent decrease in the dollar volume of Government-Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) loans.  

SECOND QUARTER ORIGINATIONS UP 66 PERCENT FROM THE FIRST QUARTER OF 2021

On a quarterly basis, second quarter originations for hotel properties increased 228 percent compared to the first quarter 2021. There was a 219 percent increase in originations for health care properties, a 76 percent increase for industrial properties, a 65 percent increase for office properties, a 62 percent increase for retail properties, and originations for multifamily properties increased 49 percent.  

Among investor types, between the first and second quarter of this year, the dollar volume of loans for commercial banks portfolios increased 107 percent, loans for life insurance companies increased 94 percent, and originations for CMBS increased 76 percent. Only the dollar volume of loans for the GSEs decreased last quarter, by 8 percent.  

To view the report, please visit: https://www.mba.org/Documents/Research/2Q21CMFOriginationsSurvey.pdf