Q3 Commercial, Multifamily Mortgage Originations Up 2 Percent Annually in U.S.

According to the Mortgage Bankers Association’s latest Quarterly Survey of Commercial and Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage loan originations for the first nine months of 2016 increased 2 percent compared to the same period last year. Third quarter 2016 commercial and multifamily mortgage loan originations were 5 percent higher than the third quarter of 2015 and seven percent higher than the second quarter of 2016.

“Rising property values, robust property fundamentals, low interest rates and a strong transaction market continue to drive potentially record setting paces in commercial and multifamily mortgage originations. Through the first nine months of the year, borrowing and lending backed by commercial real estate is running two percent ahead of last year’s pace,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.  “Originations for bank balance sheets, life companies and Fannie Mae and Freddie Mac are all running ahead of last year’s record paces.  And after a slow start to the year, the commercial mortgage backed securities market also saw a pick-up in the third quarter.”

THIRD QUARTER 2016 ORIGINATIONS UP FIVE PERCENT COMPARED TO THIRD QUARTER 2015

A rise in originations for industrial and multifamily led the overall increase in commercial/multifamily lending volumes when compared to the third quarter of 2015.  The third quarter saw a 32 percent year-over-year increase in the dollar volume of loans for industrial properties, a 26 percent increase for multifamily properties, a 5 percent decrease for office properties, a 23 percent decrease for retail properties, a 30 percent decrease in hotel property loans, and a 59 percent decrease in health care property loans.

Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) loans increased by 82 percent year-over-year.  There was a 3 percent year-over-year decrease for life insurance company loans, a 4 percent decrease in Commercial Mortgage Backed Securities (CMBS) loans, and a 9 percent decrease in the dollar volume of commercial bank portfolio loans.

THIRD QUARTER 2016 ORIGINATIONS UP SEVEN PERCENT FROM SECOND QUARTER 2016

Third quarter 2016 originations for industrial properties increased 20 percent compared to the second quarter 2016.  There was a 19 percent increase in originations for health care properties, an 18 percent increase for multifamily properties, an 18 percent increase for office properties, an 8 percent increase for retail properties, and a 44 percent decrease for hotel properties from the second quarter 2016.

Among investor types, between the third and second quarter of 2016, the dollar volume of loans for CMBS increased 96 percent, loans for GSEs increased 35 percent, originations for life insurance companies decreased 4 percent, and loans for commercial bank portfolios decreased by 25 percent.

Michael Gerrity, World Property Journal

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