Commercial and multifamily mortgage loan originations increased 72% in the first quarter of 2022 compared to the same period last year, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. In line with seasonality trends, originations during the first three months of 2022 year were 39% lower than the fourth quarter of 2021.
“The strong momentum in commercial and multifamily borrowing and lending at the end of 2021 carried into the first quarter,” comments Jamie Woodwell, MBA’s vice president of commercial real estate research. “The continued growth in lending activity is the result of the ongoing strong demand for certain property types like industrial and multifamily, as well as renewed interest in other property types that saw more dramatic declines during the early stages of the pandemic, such as hotel and retail.”
“It’s likely that the rise in interest rates will take some wind out of the sails of borrowing in upcoming quarters, but strong market fundamentals, property values and investor interest should continue to support the market,” Woodwell continues.
Compared to a year earlier, a rise in originations for hotel, industrial, and retail properties led the overall increase in commercial/multifamily lending volumes. By property type, hotels increased by 359%, industrial increased by 145%, retail increased by 88%, health care properties increased by 81%, multifamily increase by 57% and office increased 30%.
Among investor types, the dollar volume of loans originated for depositories increased by 194% year-over-year. Life insurance company portfolios increased 81%, investor-driven lenders increased 77%, Commercial Mortgage-Backed Securities (CMBS) increased 56%, and Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) increased 1%.
As is typical in the first quarter, originations decreased in comparison to the prior year’s fourth quarter, with total activity falling 39%. Among property types, declines were seen in office (48%), multifamily (41%), hotel (38%), retail (32%), and industrial (29%). Health care properties increased 17%.
Among investor types, the dollar volume of loans for CMBS decreased 61%, loans for depositories decreased 41%, originations for GSEs decreased 39%, investor-driven lenders decreased 30% and life insurance company loans decreased 23%.
Read the full report here.