Commercial and multifamily mortgage originations in the second quarter were 20% higher than during the same period last year and 28% higher than the first quarter of 2017, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
“Borrowing and lending backed by commercial and multifamily properties has been strong the first half of this year,” says 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.”
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% year-over-year increase in the dollar volume of loans for industrial properties, a 33% increase for office properties, a 21% increase for multifamily properties, a 14% increase for hotel properties, a 7% increase in health care property loans, and a 9% decrease in retail property loans.
Among investor types, the dollar volume of loans originated for commercial mortgage backed securities (CMBS) loans increased by 168% year-over-year. There was a 26% year-over-year increase for government sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) loans, a 2% decrease in life insurance company loans, and a 21% decrease in the dollar volume of commercial bank portfolio loans.
The MBA says second quarter 2017 originations for hotel properties increased 139% compared to the first quarter 2017. There was a 39% increase in originations for industrial properties, a 39% increase for office properties, a 34% increase for retail properties, a 25% increase for multifamily properties, and a 34% 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%, loans for life insurance companies increased 25%, originations for GSEs increased 22%, and loans for commercial bank portfolios decreased by 5%
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