MBA: 3Q Commercial/Multifamily Borrowing Post Strong Gains

The Mortgage Bankers Association this morning reported commercial and multifamily mortgage loan originations rose by 24 percent in the third quarter from a year ago and by 9 percent from the second quarter.

MBA released its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

“Low interest rates are supporting strong levels of commercial and multifamily borrowing and lending,” said MBA Vice President for Commercial Real Estate Research Jamie Woodwell. “Through the third quarter, every major capital source is lending at a pace above last year’s level. Loans backed by multifamily and industrial properties, and made for life companies and Fannie Mae and Freddie Mac, are all running at a record pace.” 

Woodwell said the current low interest rate environment should continue to support property values and encourage borrowing into 2020.

Originations Increase 24 percent from Year Ago

A rise in originations for health care, industrial, office and multifamily properties led the overall third quarter increase in commercial/multifamily lending volumes in the third quarter from a year ago. MBA reported a 239 percent year-over-year increase in the dollar volume of loans for health care properties, a 42 percent increase for industrial properties, a 36 percent increase for office properties and a 16 percent increase for multifamily properties. Retail property loan originations fell by 2 percent, while hotel property lending decreased 20 percent.

Among investor types, dollar volume of loans originated for commercial mortgage-backed securities loans increased by 52 percent year-over-year, by 44 percent for commercial bank portfolio loans, by 11 percent for the government-sponsored Enterprises (Fannie Mae and Freddie Mac) and by 6 percent for life insurance company loans.

3Q Originations Up 9 Percent from Second Quarter

On a quarterly basis, third quarter originations for health care properties increased by 60 percent from the second quarter. MBA reported a 23 percent increase in originations for industrial properties, a 14 percent increase for multifamily properties and a 13 percent increase for retail properties. Originations for office properties declined by 9 percent, while hotel property lending fell by 22 percent.

Among investor types, dollar volume of loans for commercial bank portfolios increased by 10 percent, loans for GSEs increased by 7 percent and originations for life insurance companies increased by 4 percent. Loans for commercial bank portfolios decreased by 5 percent.

To view the report, click https://www.mba.org/Documents/Research/3Q19CMFOriginationsSurvey.pdf