MBA: Total Commercial Real Estate Borrowing and Lending Declined 47% in 2023

(View of buildings in Chicago via Nachelle Nocom/

Total commercial real estate mortgage borrowing and lending is estimated to have totaled $429 billion in 2023, a 47% decrease from the $816 billion in 2022, and a 52% decrease from the record $891 billion in 2021. This is according to the Mortgage Bankers Association’s 2023 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.

Excluding activity from smaller and mid-sized depositories not directly captured, MBA’s survey tracked $306 billion of loans closed by dedicated commercial mortgage bankers in 2023–49% less than the $595 billion reported in 2022.

“Higher interest rates, uncertainty about property values, and questions about some properties’ fundamentals led to a steep fall-off in borrowing and lending backed by commercial real estate last year,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “The declines were broad-based, covering every major property type and capital source. The sustained growth in the amount of CRE mortgage debt outstanding signals that much of the drop in originations was driven by a decline in borrower demand stemming from slowdowns in sales transactions and refinances. If property owners had the ability to sit pat, they generally did.”

Woodwell continued, “All indications are that 2024 is off to a slow start as well. While higher interest rates are likely to continue to act as a deterrent for many property owners, more than $900 billion of maturities–and perhaps acquiescence to those higher rates – are likely to bring some additional deals to the market this year.”

Among different property types, multifamily properties saw the highest volume last year, with an estimated $264 billion of total lending and $178 billion directly tracked by dedicated mortgage bankers. First liens accounted for 96% of the mortgage bankers’ dollar volume closed.

Dedicated mortgage banking firms reported closing $306 billion of CRE loans in their own names and serving as intermediaries on $225 billion. Firms reported serving as investment sales brokers for $225 billion of deals.

Depositories were the leading capital source of CRE mortgage debt, followed by life insurance companies and pension funds, government-sponsored enterprises (Fannie Mae and Freddie Mac), private label CMBS, and investor-driven lenders.

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