Commercial/Multifamily Borrowing Increased 59% in Third Quarter, MBA Finds
Commercial and multifamily mortgage loan originations increased 59% in the third quarter of 2024 compared to a year ago, and increased 44% from the second quarter, according to MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
“After a slow start to the year, borrowing and lending backed by commercial real estate properties picked up during the third quarter,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “Lower interest rates were a key driver of the increase, with the yield on the Ten-year Treasury bond dropping during the quarter from an average of 4.31% in June to 3.72% in September. “Long-term rates have increased more recently, which could slow last quarter’s momentum.”
Woodwell continued, “Each property and loan is unique and faces a different situation depending on its property type, market, submarket, vintage, business plan and more. All those factors will play a role in the volume of borrowing/lending in coming quarters.”
ORIGINATIONS INCREASED 59% IN THE THIRD QUARTER OF 2024
Originations in the third quarter of 2024 varied across the different property types. There was a 510% year-over-year increase in the dollar volume of loans for health care properties, a 99% increase for hotel properties, an 82% increase for retail properties, a 57% increase for industrial properties, and a 56% increase for multifamily properties. Office property originations decreased 3%.
Among investor types, the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) increased by 260% year-over-year. There was a 69% increase for depository loans, a 62% increase for investor-driven lender loans, a 31% increase in loans for life insurance companies, and a 28% increase for government sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) loans.
THIRD-QUARTER 2024 ORIGINATIONS UP 44% FROM SECOND-QUARTER 2024
On a quarterly basis, in the third quarter of 2024 originations for health care properties increased 191% compared to the second quarter of 2024. There was a 56% increase in originations for retail properties, a 53% increase for multifamily properties, a 42% increase for office properties, and originations for industrial properties increased 21%. The dollar volume of loans for hotel properties decreased 25%.
Among investor types, between the second and third quarters of 2024, the dollar volume of loans for depositories increased 86%, loans for GSEs increased 55%, originations for life insurance companies increased 40%, loans for investor-driven lenders increased 21%, and the dollar volume of loans for CMBS increased by 12%.
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