MBA: 2Q Commercial/Multifamily Borrowing Jumps by 29% from 1Q, 10% From Year Ago

MBA NewsLink Staff

August 22, 2019


Commercial and multifamily mortgage loan originations rose by 29 percent from the first quarter and rose by10 percent from a year ago, the Mortgage Bankers Association reported this morning in its Quarterly Survey of Commercial/Multifamily Bankers Originations.

"Falling long-term interest rates and sustained strength in commercial real estate markets lifted commercial and multifamily mortgage originations during the second quarter," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Originations for life insurance companies and for Fannie Mae and Freddie Mac continued at record paces during the first half of the year, as did originations of loans backed by multifamily and industrial properties. With rates even lower during the third quarter, absent a major economic disruption, 2019 is shaping up to be another record year for commercial mortgage lending."

Originations Increase 10% from Year Ago
A rise in originations for health care, office, industrial and multifamily properties led overall second quarter increase in commercial/multifamily lending volumes when compared to the second quarter of 2018. MBA reported a 151 percent year-over-year increase in dollar volume of loans for health care properties; a 23 percent increase for office properties; a 16 percent increase for industrial properties; and a 15 percent increase for multifamily properties. Retail property loan originations fell 32 percent, while hotel property lending decreased 28 percent.

Among investor types, dollar volume of loans originated for government-sponsored enterprises (Fannie Mae and Freddie Mac) increased by 19 percent year-over-year and by 17 percent for commercial bank portfolio loans. MBA reported a 4 percent decrease in life insurance company loans and a 15 percent decrease in the dollar volume of commercial mortgage-backed securities loans.

2Q Originations Speed Up from 1Q
On a quarterly basis, second quarter originations for office properties increased by 66 percent compared to the first quarter. MBA reported a 62 percent increase in originations for health care properties, a 32 percent increase for multifamily properties, an 18 percent increase for hotel properties and a 15 percent increase for retail properties. Originations for industrial buildings declined by 27 percent from the first three months of the year.

Among investor types, second quarter dollar volume of loans for CMBS increased 58 percent from the first quarter; loans for GSEs increased by 39 percent; originations for commercial bank portfolios increased by 35 percent; and loans for life insurance companies increased by 9 percent.

The MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations can be accessed at https://www.mba.org/Documents/Research/2Q19CMFOriginationsSurvey.pdf.

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