MBA: 1st Quarter Commercial/Multifamily Borrowing Down 56%
Commercial and multifamily mortgage loan originations fell by 56 percent in the first quarter from a year ago, and fell by 42 percent from the fourth quarter, according to the Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
“While the first quarter is typically the quietest quarter of the year, borrowing and lending backed by commercial and multifamily properties declined in the first quarter to the slowest pace since the first quarter of 2014,” said Jamie Woodwell, MBA Head of Commercial Real Estate Research. “Uncertainty and volatility in regard to interest rates and property values, and supply and demand imbalances for some property types, has led to a logjam in commercial real estate sales and financing markets.”
Woodwell noted as loans mature and adjustable-rate loans reset, “we should start to get greater insights into where things stand.”
1Q ORIGINATIONS DOWN 56 PERCENT
Decreases in originations for all major property types led to the overall drop in commercial/multifamily lending volumes from a year ago. MBA reported a 72 percent year-over-year decrease in dollar volume of loans for industrial properties, a 69 percent decrease for health care properties, a 67 percent decrease for office properties, a 55 percent decrease for multifamily properties, an 8 percent decrease for hotel properties and an 8 percent decrease for retail properties.
Among investor types, dollar volume of loans originated for life insurance company loans decreased by 73 percent year-over-year, followed by a 67 percent decrease for investor-driven lenders, a 59 percent decrease in commercial mortgage-backed securities loans, a 54 percent decrease for depositories and a 14 percent decrease in government-sponsored enterprises (Fannie Mae and Freddie Mac) loans.
1Q ORIGINATIONS DOWN 42 PERCENT FROM FOURTH QUARTER
Fourth-quarter originations for health care properties decreased 65 percent from the fourth quarter, followed by a 61 percent decrease in originations for office properties, a 44 percent decrease for multifamily properties and a 36 percent decrease for industrial properties. Originations for retail properties increased by 12 percent; originations for hotel properties increased 5 percent.
Among investor types, dollar volume of loans for life insurance companies decreased 56 percent from the fourth quarter. Loans for depositories decreased by 48 percent, originations for investor-driven lenders decreased 42 percent and loans for GSEs decreased 40 percent. Dollar volume of loans for CMBS increased by 99 percent.
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