Commercial/Multifamily Borrowing Jumped 119 Percent in the Third Quarter of 2021

CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727

WASHINGTON, D.C. (November 4, 2021) - Commercial and multifamily mortgage loan originations were 119 percent higher in the third quarter of 2021 compared to a year ago and increased 19 percent from the second quarter of 2021, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

"Overall commercial real estate borrowing and lending are running at high levels, but there continues to be an important differentiation by property type," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Borrowing hit an all-time quarterly high during the third quarter, driven by strong or improving market fundamentals, higher property values, low interest rates, and solid mortgage performance. Borrowing and lending backed by industrial and multifamily properties are each running at a record annual pace. And while year-to-date office and retail lending are each up significantly from last year, both remain below 2019 levels."  

Woodwell continued, "Among capital sources, nearly every major group - including CMBS, banks, life companies and investor-driven lenders - is lending well above 2020 levels, with life companies and investor-driven lenders also exceeding their 2019 year-to-date volumes. The one exception is the GSEs (Fannie Mae and Freddie Mac), whose conservator limited their loan purchase volumes this year.

ORIGINATIONS INCREASE 119 PERCENT IN THE THIRD QUARTER OF 2021

All property types showed an increase in the third quarter in commercial/multifamily lending volumes when compared to the third quarter of 2020. The third quarter saw an 866 percent year-over-year increase in the dollar volume of loans for hotel properties, a 317 percent increase for retail properties, a 156 percent increase for industrial properties, a 105 percent increase for multifamily properties, a 102 percent increase for office properties, and a 45 percent increase for health care property loan originations.  

Among investor types, the dollar volume of loans originated for investor-driven lenders (REITs, specialty finance, credit companies, and other) increased by 319 percent year-over-year. There was a 232 percent increase for commercial bank portfolio loans, a 175 percent increase for life insurance company loans, a 125 percent increase in the dollar volume of Commercial Mortgage-Backed Securities (CMBS) loans, and a 15 percent increase for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac origination loans).  

THIRD QUARTER ORIGINATIONS UP 19 PERCENT FROM THE SECOND QUARTER OF 2021  

On a quarterly basis, third quarter originations for retail properties increased 62 percent compared to the second quarter 2021. There was a 60 percent increase in originations for hotel properties, a 31 percent increase for multifamily properties, and a 9 percent increase for office properties. Industrial properties were essentially unchanged, and originations for health care properties decreased 52 percent.  

Among investor types between the second and third quarter of this year, the dollar volume of loans for GSEs increased 79 percent, commercial banks' portfolios increased 51 percent, and originations for life insurance companies increased 3 percent. Loans for CMBS decreased 5 percent, and loans for investor-driven lenders decreased 6 percent.  

To view the report, please visit: www.mba.org/Documents/Research/3Q21CMFOriginationsSurvey.pdf