Commercial/multifamily originations were up 15% in 2013, compared to 2012, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers' Originations.
A lot of that growth came in the fourth quarter: Commercial and multifamily mortgage originations increased 34%, compared to the third quarter, and were up 16% compared to the fourth quarter of 2012, according to the report.
‘Commercial and multifamily mortgage borrowing and lending ended 2013 on a particularly strong note,’ says Jamie Woodwell, vice president of commercial real estate research for the MBA, in a statement. ‘The fourth quarter marked the highest volume of mortgage originations since 2007, as all the major investor groups increased their activity. Initial indications are that 2013's volume was up 15 percent from 2012 – putting 2013 originations in the neighborhood of $280 billion in closed loans.’
Driving the overall increase were increases in originations for health care, retail and office properties. In the past year, there was 70% boost in the dollar volume of loans for health care properties, a 43% increase for retail properties, and a 27% increase for office properties, according to the MBA.
Originations for multifamily properties were flat; originations for hotel properties fell 9%; and originations for industrial properties recorded a 30% decline when compared to the fourth quarter of 2012.
Among investor types, the annual dollar volume of loans originated for commercial bank portfolios increased by 54%. There was a 40% increase for life insurance companies, a 15% increase for CMBS and a 43% decrease in dollar volume of loans originated for government sponsored enterprises Fannie Mae and Freddie Mac.
The MBA forecasts that commercial/multifamily originations will grow to $300 billion in 2014, a 7% increase from 2013. It further predicts that volume will continue to rise to $333 billion in 2016.
Originations of multifamily mortgages alone are forecast to reach $116 billion in 2014, the MBA says.
‘Early indications are that commercial and multifamily lenders increased originations by 15 percent in 2013,’ Woodwell says. ‘This year will once again see fewer loans coming up against their maturities. But with still low interest rates, improving property fundamentals, a rebound in property prices, and higher loan maturity volumes on the horizon, we anticipate mortgage originations will continue to increase in 2014.’
Commercial/multifamily mortgage debt outstanding is expected to continue to grow in 2014, ending the year at almost $2.6 trillion, more than 3% higher than at the end of 2013.
The MBA forecasts that by the end of 2016, commercial/multifamily mortgage debt outstanding will approach $2.7 trillion.
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