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MBA: Commercial/Multifamily Mortgage Originations Increase 16 Percent in Q3

MBA Originations

Source: MBA

WASHINGTON, D.C. — Third-quarter 2014 commercial and multifamily mortgage loan originations were 16 percent higher than during the same period last year and 18 percent higher than the second quarter of 2014, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

“Commercial real estate borrowing and lending continued at a strong clip in the third quarter,” says Jamie Woodwell, MBA’s vice president of commercial real estate research. “Low [interest] rates coupled with growth in property incomes, property values and sales transactions have pushed year-to-date commercial and multifamily mortgage originations five percent above last year’s pace.”

Industrial, Multifamily Sectors Lead the Way
The 16 percent overall increase in commercial/multifamily lending volumes, when compared to the third quarter of 2013, was driven by an increase in originations for industrial and multifamily properties.

The increase included a 41 percent increase in the dollar volume of loans for multifamily properties, a 22 percent increase for industrial properties, an 11 percent increase for office properties, an 11 percent increase for retail properties, a 4 percent increase in hotel property loans, and a 43 percent decrease in healthcare property loans.

Among investor types, the dollar volume of loans originated for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac increased by 118 percent from last year’s third quarter. There was a 47 percent increase for CMBS loans, a 1 percent increase for life insurance company loans, and a 16 percent decrease in dollar volume for commercial bank portfolio loans.

Q3 Versus Q2 Comparison
Third-quarter 2014 commercial and multifamily mortgage originations were 18 percent higher than in the second quarter. Compared to the second quarter of 2014, third-quarter originations for office properties increased 43 percent. There was a 31 percent increase in originations for multifamily properties, a 19 percent increase for industrial properties, a 7 percent increase for retail properties, an 11 percent decrease for hotel properties, and a 24 percent decrease for healthcare properties from the second quarter.

Among investor types, between the second and third quarters of 2014, the dollar volume of loans for GSEs increased 57 percent, loans for CMBS increased 10 percent, originations for life insurance companies increased 9 percent, and loans for commercial bank portfolios decreased by 7 percent.

Year-to-date comparison
Commercial and multifamily mortgage origination volumes year-to-date through the third quarter of 2014 were 5 percent higher than originations during the same period a year ago. Compared to year-to-date 2013, originations for industrial properties increased 29 percent. There was a 27 percent increase for hotel properties, a 6 percent increase for office properties, a 4 percent increase for multifamily properties, a 2 percent decrease for health care properties, and a 6 percent decrease for retail properties.

Among investor types (year-to-date 2014 versus year-to-date 2013), loans for CMBS increased 28 percent, loans for commercial bank portfolios increased 14 percent, originations for GSEs increased 3 percent, and loans for life insurance companies decreased 1 percent.

— Staff Reports

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