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Commercial/Multifamily Originations Slowed During the Third Quarter

Commercial/Multifamily Originations Slowed During the Third Quarter

WASHINGTON, D.C. (November 19, 2018) – (RealEstateRama) — A pullback in lending activity across most property types contributed to a decline in total mortgage loan originations during the third quarter, 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 decreased 3 percent during the third quarter, and was 7 percent lower than a year ago,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Rising interest rates took some wind out of the market’s sails, with the 10-year Treasury yield starting the quarter at 2.87 percent and finishing at 3.05 percent, and the 2-year Treasury starting at 2.57 percent and ending at 2.81 percent. The CMBS and bank lending markets were the hardest hit. Meanwhile, lending backed by multifamily properties and for the government sponsored enterprises (GSEs) continued to grow.”

Compared to a year earlier, a decline in third quarter originations for health care and retail properties led the overall decrease in commercial/multifamily borrowing volumes. By property type, there was a 55 percent year-over-year decrease in the dollar volume of loans for health care properties; a 28 percent decrease for retail properties; a 19 percent decrease for hotel properties; and a 17 percent decrease for office properties. Originations last quarter increased for loans backed by multifamily and industrial properties (each by 19 percent).

Among investor types, the dollar volume of loans originated during the third quarter for CMBS loans and commercial bank portfolio loans decreased from a year earlier, by 53 percent and 22 percent, respectively. Loan originations increased for life insurance companies, up 4 percent, and the GSEs (Fannie Mae and Freddie Mac), up 3 percent.

Compared to the second quarter, third quarter originations for hotel properties decreased 30 percent, originations for retail properties declined 22 percent, and originations for office properties saw an 18 percent decline. Originations of loans backed by health care properties increased by 18 percent, as did multifamily properties (13 percent). Industrial property loans were essentially unchanged.

Among investor types, between the second and third quarter of this year the dollar volume of loans for CMBS decreased 47 percent, loans for commercial bank portfolios decreased 10 percent, originations for life insurance companies decreased 6 percent, and GSE loans increased by 14 percent.

To view the report, please visit the following Web link: https://www.mba.org/Documents/Research/3Q18CMFOriginationsSurvey.pdf

CONTACT
Adam DeSanctis

(202) 557-2727

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MBA

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

Contact:

Mortgage Bankers Association
1331 L Street, NW
Washington, DC 20005

Phone: (202) 557-2700