Commercial, Multifamily Borrowing in U.S. Up 20 Percent Year-over-Year
Commercial real estate lending is ramping up in 2017. According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, second quarter 2017 commercial and multifamily mortgage loan originations were 20 percent higher than during the same period last year and 28 percent higher than the first quarter of 2017.
“Borrowing and lending backed by commercial and multifamily properties has been strong the first half of this year,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Reflecting broad industry trends, borrowing backed by industrial properties increased by two-thirds compared to the first half of 2016, while borrowing backed by retail properties dropped by one-sixth. As was the case during the first quarter, commercial/multifamily mortgage bankers’ originations increased despite a slowdown in the volume of sales transactions.”
SECOND QUARTER 2017 ORIGINATIONS UP 20 PERCENT COMPARED TO SECOND QUARTER 2016
A rise in originations for industrial and office properties led the overall increase in commercial/multifamily lending volumes when compared to the second quarter of 2016. The second quarter saw a 91 percent year-over-year increase in the dollar volume of loans for industrial properties, a 33 percent increase for office properties, a 21 percent increase for multifamily properties, a 14 percent increase for hotel properties, a 7 percent increase in health care property loans, and a 9 percent decrease in retail property loans.
Among investor types, the dollar volume of loans originated for Commercial Mortgage Backed Securities (CMBS) loans increased by 168 percent year-over-year. There was a 26 percent year-over-year increase for Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) loans, a 2 percent decrease in life insurance company loans, and a 21 percent decrease in the dollar volume of commercial bank portfolio loans.
SECOND QUARTER 2017 ORIGINATIONS UP 28 PERCENT FROM FIRST QUARTER 2017
Second quarter 2017 originations for hotel properties increased 139 percent compared to the first quarter 2017. There was a 39 percent increase in originations for industrial properties, a 39 percent increase for office properties, a 34 percent increase for retail properties, a 25 percent increase for multifamily properties, and a 34 percent decrease for health care properties from the first quarter 2017.
Among investor types, between the first and second quarter of 2017, the dollar volume of loans for CMBS increased 117 percent, loans for life insurance companies increased 25 percent, originations for GSEs increased 22 percent, and loans for commercial bank portfolios decreased by 5 percent.