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‘A Record Year’: Commercial/Multifamily Loan Originations Increased 15 Percent in 2017, Says MBA

Jamie Woodwell, vice president of commercial real estate research for MBA, speaks during MBA’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2018 in San Diego.

WASHINGTON, D.C. — Commercial and multifamily mortgage originations for all of 2017 increased 15 percent on a year-over-year basis, bolstered by the strength of the multifamily, industrial and office sectors, according to the Mortgage Bankers Association (MBA).

The preliminary estimate was released Sunday during MBA’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo 2018 in San Diego. The estimate is based on the MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The MBA reported that originations totaled $491 billion in 2016.

Breaking down the numbers
Originations for hotel properties increased 26 percent in 2017 over the prior year, the MBA reports, followed by industrial (+22 percent), multifamily (+17 percent), office (+12 percent) and healthcare (+9 percent).

On the flip side, originations for the retail sector declined 21 percent in 2017 due in part to the dramatic growth of e-commerce. Even so, it was banner year overall for the mortgage banking community.

“Based on these preliminary numbers, 2017 was a record year for borrowing and lending backed by commercial real estate properties,” said Jamie Woodwell, vice president of commercial real estate research for MBA, which is headquartered in Washington, D.C.

“The increase was driven by multifamily lending, particularly for Fannie Mae and Freddie Mac, coupled with overall growth in originations for commercial mortgage-backed securities and other capital sources. Entering 2018, there continues to be strong interest to lend by just about every major capital source,” adds Woodwell.

Among investor types for 2017 versus 2016, loans for CMBS increased 43 percent, originations for the government-sponsored enterprises (GSEs Fannie Mae and Freddie Mac) climbed 23 percent, loans for commercial bank portfolios fell 1 percent and loans for life insurance companies decreased 2 percent.

— Matt Valley

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