MBA: Commercial/Multifamily Orginations Start Year Flat
First quarter commercial and multifamily origination volume fell by nearly 40 percent from the fourth quarter and was flat from a year ago, the Mortgage Bankers Association reported this morning.
The MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations showed little change from a year ago. From the fourth quarter, originations fell by 38 percent. MBA Vice President of Commercial Real Estate Research Jamie Woodwell said was in line with seasonal market conditions, with first quarter originations typically coming in weaker than other quarters.
“In the aggregate, commercial real estate borrowing and lending started 2016 in a similarly strong fashion to 2015,” Woodwell. “Borrowing backed by retail, office, hotel and multifamily properties picked up, as did lending by banks. Disruptions in the broader capital markets pushed originations for commercial mortgage-backed securities down.”
Woodwell noted that changes in regulations and broader market conditions could have an impact on originations for the rest of 2016.
1Q Originations Up Slightly from Year Ago
A rise in originations for retail and office properties led overall increase in commercial/multifamily lending volumes compared to a year ago. The first quarter saw a 44 percent year-over-year increase in dollar volume of loans for retail properties, an 18 percent increase for office properties, a 2 percent increase for multifamily properties, a 3 percent increase for hotel properties, a 56 percent decrease in industrial property loans and a 57 percent decrease in health care property loans.
Among investor types, dollar volume of loans originated for commercial bank portfolio loans increased by 44 percent year-over-year. MBA reported a 1 percent decrease for life insurance company loans, a 19 percent decrease volume of CMBS loans and a 22 percent decrease in Government-Sponsored Enterprises (Fannie Mae and Freddie Mac) loans.
1Q Originations Down 38% from 4Q
MBA said in line with seasonality of the market, first quarter originations for health care properties decreased by 62 percent compared to the fourth quarter. MBA reported a 57 percent decrease in originations for hotel properties, a 57 percent decrease for industrial properties, a 46 percent decrease for retail properties, a 39 percent decrease for multifamily properties and a 23 percent decrease for office properties from the fourth quarter 2015.
Among investor types, dollar volume of loans for GSEs decreased 45 percent from the fourth quarter; loans for commercial bank portfolios decreased by 39 percent, originations for life insurance companies decreased by 32 percent; and loans for CMBS decreased by 29 percent.
To view the report, click https://www.mba.org/Documents/Research/1Q16CMFOriginationsSurvey.pdf.
