May 17, 2019
Commercial and multifamily mortgage loan originations rose 12% in the first quarter of 2019 compared to the same period last year, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. In line with seasonality trends, originations the first three months of the year were 34% lower than the fourth quarter of 2018.
MBA’s Vice President of Commercial Real Estate Research Jamie Woodwell says, “The momentum seen in 2018’s record year of borrowing and lending continued in the first quarter of this year. First quarter volumes were higher for nearly every property type, and double-digit growth in loan volume for Fannie Mae and Freddie Mac led the increase among capital sources.”
Woodwell pointed out that “Low interest rates and strong property values continue to make commercial real estate an attractive market for borrowers.”
Compared to a year earlier, a rise in originations for industrial, healthcare and hotel properties led the overall increase in commercial/multifamily lending volumes. By property type, industrial (73%), healthcare (41%), hotels (14%), retail (9%) and multifamily (9%) all experienced year-over-year gains by dollar volume. The dollar volume of office property loans was unchanged.
Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) increased by 14% year-over-year. Life insurance company loans increased 7%, commercial bank portfolios increased 6%, while loans originated for CMBS decreased 4%.
MBA notes it is typical for first quarter originations to decrease in comparison to the previous year’s fourth quarter. Among property types, declines were seen in healthcare (49%), hotels (45%), multifamily (40%), retail (32%) and office space (30%). Industrial properties bucked the overall trend, rising 17% from the fourth quarter of 2018.
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