MBA: Commercial Mortgage Originations Down in Q4; 2016, 2015 Totals Even

MBA NewsLink Staff

February 23, 2017


SAN DIEGO--Commercial and multifamily mortgage originations increased by 20 percent between the third and the fourth quarters and fell by 7 percent from a year ago, according to the Mortgage Bankers Association's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

MBA released the report here at its Commercial Real Estate Finance/Multifamily Housing Convention & Expo.

MBA commercial/multifamily mortgage bankers' originations index provides a preliminary estimate that originations for the full year 2016 were 1 percent lower than in 2015.

"Commercial and multifamily mortgage borrowing and lending ended 2016 on a strong note, but not quite as strong as 2015," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "As a result, mortgage origination volumes for 2016 as a whole appear to have come in at roughly the same level as 2015. Preliminary numbers show that 2016 lending by Fannie Mae and Freddie Mac, bank portfolios and life insurance companies were all at or above previous record levels."

4Q Originations Down 7% from Year Ago
A decrease in originations for hotel, health care and retail properties led the overall decline in commercial/multifamily lending volumes compared to a year ago. The fourth quarter saw a 39 percent year-over-year decrease in the dollar volume of loans for hotel properties, a 24 percent decrease for health care properties, a 19 percent decrease for retail properties, a 4 percent decrease for industrial properties, a 1 percent decrease in multifamily property loans and a 6 percent increase in office property loans.

Among investor types, dollar volume of loans originated for commercial bank portfolios decreased by 17 percent year-over-year. MBA reported a 6 percent year-over-year decline for life insurance company loans, a 2 percent decrease in commercial mortgage-backed securities loans and a 4 percent increase in the dollar volume of government-sponsored enterprises (Fannie Mae and Freddie Mac) loans.

4Q Originations Up 20% from 3Q
Fourth quarter originations for health care properties increased by 122 percent compared to the third quarter. MBA reported a 103 percent increase in originations for hotel properties, an 82 percent increase for industrial properties, a 21 percent increase for retail properties, a 16 percent increase for multifamily properties and a 10 percent increase for office properties.

Among investor types, dollar volume of loans for commercial bank portfolios increased by 37 percent, loans for life insurance companies increased 13 percent, originations for GSEs increased 8 percent and loans for CMBS increased by 5 percent.

Preliminary 2016 Originations 1% Lower than 2015
A preliminary measure of commercial and multifamily mortgage origination volumes shows 2016 originations 1 percent lower from 2015. Originations for health care properties decreased by 49 percent. MBA reported a 23 percent decrease for hotel properties, a 16 percent decrease for industrial properties, a 10 percent decrease for retail properties, a 6 percent increase for office properties and a 6 percent increase for multifamily properties.

Among investor types, loans for CMBS decreased by 15 percent, originations for life insurance companies were flat, loans for commercial bank portfolios increased 6 percent and loans for GSEs increased 10 percent in 2016 versus 2015.

In late March, MBA will release its Annual Origination Summation report for 2016 with final origination figures for the year.

To view the report, click https://www.mba.org/Documents/Research/4Q16CMFOriginationsSurvey.pdf.

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