Commercial Borrowing Hit New Record in Q4 2021, MBA Reports


Commercial and multifamily mortgage loan originations were 79% higher in the fourth quarter of 2021 compared to a year ago, and increased 44% from the third quarter of 2021. This is according to the Mortgage Bankers Association‘s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, which was released today at the 2022 Commercial/Multifamily Finance Convention and Expo.

“The fourth quarter of 2021 was a record end to a record year of borrowing and lending backed by commercial and multifamily properties,” says Jamie Woodwell, MBA’s vice president of commercial real estate research. “Part of the growth from 2020 was a bounce-back from the worst of the recession. However, rebounding property fundamentals and strong valuations, record sales transaction volumes, and low interest rates all fueled commercial and multifamily borrowing and lending activity that easily outpaced previous periods.” 

Increases in originations for hotel, office, industrial and retail properties led the overall jump in commercial/multifamily lending volumes when compared to the fourth quarter of 2020. There was a 167% year-over-year increase in the dollar volume of loans for hotel properties, a 122% increase for office properties, a 113% increase for industrial properties, a 109% increase for retail properties, and a 57% increase for multifamily properties. Health care property loan originations decreased 17% compared to the fourth quarter of 2020.  

Among investor types, the dollar volume of loans originated for Commercial Mortgage-Backed Securities (CMBS) increased by 305% year-over-year. There was a 211% increase for investor-driven lenders, a 147% increase in commercial bank portfolio loans, a 63% increase for life insurance company loans, and a 30% decrease in the dollar volume of Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) loans. 

On a quarterly basis, fourth-quarter originations for industrial properties jumped 96% compared to the third of quarter 2021. There was a 42% increase in originations for hotel properties, a 39% increase for office properties, a 35% increase for multifamily properties, originations for retail increased 6%, and originations for health care properties increased 2%. 

Among investor types, between the third and four quarter of 2021, the dollar volume of loans for CMBS increased 144%, loans for commercial bank portfolios increased 59%, originations for investor-driven lenders increased 42%, loans for life insurance companies increased 18%, and the dollar volume of loans for GSEs increased by 2%.

A preliminary measure of commercial and multifamily mortgage bankers’ originations volumes shows activity in 2021 was 67% higher than in 2020. By property type, originations for industrial properties increased 140% from 2020, retail properties increased 73%, hotel properties increased 71%, office properties increased 66%, health care properties increased 56%, and multifamily property originations increased 54%. 

Among investor types from 2021 compared to 2020, loans for investor-driven lenders increased 225%, originations for CMBS increased 167%, loans for commercial bank portfolios increased 83%, and loans for life insurance companies increased 76%. GSE loans decreased 17%. 

In late March, MBA will release its Annual Origination Summation report for 2021 with final origination figures for the year.

Read the full survey report here.

Image: Sigmund on Unsplash

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