MBA: 1Q Commercial/Multifamily Borrowing Jumps 72% from Year Ago

Commercial and multifamily mortgage loan originations increased by 72 percent in the first quarter from a year ago, the Mortgage Bankers Association reported Thursday.

However, the MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations also reported originations during the first three months of 2022 were 39 percent lower than in the fourth quarter, which MBA said is typical on a seasonal basis.

“The strong momentum in commercial and multifamily borrowing and lending at the end of 2021 carried into the first quarter,” said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research. “The continued growth in lending activity is the result of the ongoing strong demand for certain property types like industrial and multifamily, as well as renewed interest in other property types that saw more dramatic declines during the early stages of the pandemic, such as hotel and retail.”

Woodwell cautioned, however, the likely rise in interest rates could take some wind out of the sails of borrowing in upcoming quarters. “But strong market fundamentals, property values and investor interest should continue to support the market,” he said.

1Q Originations Up 72% from Year Ago

From a year earlier, a rise in originations for hotel, industrial and retail properties led the overall increase in commercial/multifamily lending volumes. By property type, hotels increased by 359 percent, industrial increased by 145 percent, retail increased by 88 percent, health care properties increased by 81 percent, multifamily increase by 57 percent and office increased 30 percent.

Among investor types, dollar volume of loans originated for depositories increased by 194 percent year-over-year. Life insurance company portfolios increased by 81 percent, investor-driven lenders increased by 77 percent, commercial mortgage-backed securities increased by 56 percent and government-sponsored enterprises (Fannie Mae and Freddie Mac) increased by 1 percent.

1Q Originations Down 39% from 4Q

As is typical in the first quarter, originations decreased from the fourth quarter, with total activity falling 39 percent. Among property types, declines were seen in office (48 percent), multifamily (41 percent), hotel (38 percent), retail (32 percent) and industrial (29 percent). Health care properties, however, increased by 17 percent.

Among investor types, dollar volume of loans for CMBS decreased by 61 percent, loans for depositories decreased by 41 percent, originations for GSEs decreased by 39 percent, investor-driven lenders decreased by 30 percent and life insurance company loans decreased 23 percent.

To view the report, click here.