Commercial, Multifamily Mortgage Originations Spike 12 Percent in U.S.

According to the Mortgage Bankers Association's Quarterly Survey of Commercial and Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage loan originations rose 12 percent in the first quarter compared to the same period last year. In line with seasonality trends, originations the first three months of the year were 34 percent lower than the fourth quarter of 2018.

"The momentum seen in 2018's record year of borrowing and lending continued in the first quarter of this year," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "First quarter volumes were higher for nearly every property type, and double-digit growth in loan volume for Fannie Mae and Freddie Mac led the increase among capital sources. Low interest rates and strong property values continue to make commercial real estate an attractive market for borrowers."

Compared to a year earlier, a rise in originations for industrial, health care and hotel properties led the overall increase in commercial/multifamily lending volumes. By property type, industrial (73 percent), health care (41 percent), hotels (14 percent), retail (9 percent) and multifamily (9 percent) all saw year-over-year gains by dollar volume. The dollar volume of office property loans was unchanged.

Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) increased by 14 percent year-over-year. Life insurance company loans increased 7 percent, commercial bank portfolios increased 6 percent, while loans originated for Commercial Mortgage Backed Securities (CMBS) decreased 4 percent.

As is typical in the first quarter, originations decreased in comparison to last year's fourth quarter, with total activity falling 34 percent. Among property types, declines were seen in health care (49 percent), hotels (45 percent), multifamily (40 percent), retail (32 percent) and office space (30 percent). Industrial properties bucked the overall trend, rising 17 percent from the fourth quarter of 2018.

Among investor types, the dollar volume of loans for GSEs decreased 43 percent, originations for commercial banks decreased 34 percent, loans for life insurance companies decreased by 28 percent, and loans for CMBS decreased 22 percent.