Commercial, Multifamily Borrowing Up 21% Year-Over-Year in U.S.

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According to the Mortgage Bankers Association's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, third quarter 2017 commercial and multifamily mortgage loan originations were 21 percent higher than during the same period last year and 8 percent higher than the second quarter of 2017.

"Borrowing and lending associated with commercial and multifamily real estate increased again in the third quarter, even as sales transaction volume slowed," said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research.  "Most property types and capital sources saw stronger lending activity than a year earlier, supported by solid property fundamentals and continued property value appreciation."

THIRD QUARTER 2017 ORIGINATIONS UP 21 PERCENT COMPARED TO THIRD QUARTER 2016

A rise in originations for hotel and health care properties led the overall increase in commercial/multifamily lending volumes when compared to the third quarter of 2016.  The third quarter saw a 116 percent year-over-year increase in the dollar volume of loans for hotel properties, a 97 percent increase for health care properties, a 20 percent increase for industrial properties, a 15 percent increase for multifamily properties, an 8 percent increase in office property loans, and an 8 percent decrease in retail property loans.

Among investor types, the dollar volume of loans originated for Commercial Mortgage Backed Securities (CMBS) loans increased by 42 percent year-over-year.  There was a 22 percent year-over-year increase for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) loans, a 21 percent increase in dollar volume of commercial bank portfolio loans, and a 2 percent decrease in the life insurance company loans.

THIRD QUARTER 2017 ORIGINATIONS UP 8 PERCENT FROM SECOND QUARTER 2017

Third quarter 2017 originations for health care properties increased 120 percent compared to the second quarter 2017.  There was a 12 percent increase in originations for multifamily properties, a 10 percent increase for retail properties, a 6 percent increase for hotel properties, a 4 percent decrease for office properties, and a 25 percent decrease for industrial properties from the second quarter 2017.

Among investor types, between the second and third quarter of 2017, the dollar volume of loans for GSEs increased 31 percent, loans for commercial bank portfolios increased 15 percent, originations for CMBS increased 4 percent, and loans for life insurance companies decreased by 4 percent.