Commercial Real Estate News
U.S. Commercial Mortgage Originations Spike 27 Percent in Q2 Over Q1
The Mortgage Bankers Association's latest Quarterly Survey reports a 3 percent increase in U.S. commercial and multifamily mortgage loan originations in the second quarter of 2024 compared to the same period last year, and a significant 27 percent jump from the first quarter of 2024.
"Borrowing and lending backed by commercial real estate remained subdued in the second quarter," said Jamie Woodwell, MBA's Head of Commercial Real Estate Research. "Most capital sources remain ready, willing and able to lend on properties that can support a loan. Driven by growth in the single-asset single-borrower markets, originations for CMBS grew significantly during the quarter."
Added Woodwell, "With interest rates moderating and a large slug of loans maturing, it is likely we'll see more borrower activity in the coming quarters."
Property Type Breakdown for Q2 2024
Loan originations varied by property type in the second quarter. There was a substantial 172 percent year-over-year increase in loan volume for hotel properties, a 77 percent rise for industrial properties, and a 50 percent boost for healthcare properties. In contrast, retail property originations fell by 7 percent, multifamily properties declined by 14 percent, and office properties saw a 29 percent decrease.
Investor Type Analysis
Among different investor types, the dollar volume of loans for commercial mortgage-backed securities (CMBS) surged by 154 percent year-over-year. Loans from investor-driven lenders increased by 17 percent, and life insurance company loans rose by 11 percent. However, loans for depositories decreased by 26 percent, and loans for government-sponsored enterprises (GSEs - Fannie Mae and Freddie Mac) dropped by 20 percent.
Quarterly Comparison: Q2 2024 vs. Q1 2024
Comparing the second quarter to the first quarter of 2024, healthcare property originations skyrocketed by 178 percent. Hotel properties saw an 84 percent increase, industrial properties a 29 percent rise, multifamily properties a 27 percent uptick, and retail properties an 18 percent boost. Office property loan volumes increased by 4 percent.
Investor Activity by Quarter
Between the first and second quarters of 2024, life insurance company loans rose by 60 percent, depository loans increased by 21 percent, CMBS originations climbed by 21 percent, loans for investor-driven lenders grew by 20 percent, and GSE loan volumes increased by 16 percent.
