SAN DIEGO — The Mortgage Bankers Association (MBA) projects that originations of commercial/multifamily mortgages will grow to $414 billion in 2015, an increase of 7 percent over the prior year. Furthermore, MBA expects total loan originations will rise to $430 billion in 2016.
The loan originations outlook was released Monday during MBA’s Commercial Real Estate Finance (CREF)/Multifamily Housing & Convention Expo 2015, which runs from Feb. 1-4. There are 3,100 attendees at this year’s conference at the Manchester Grand Hyatt in San Diego, up from 2,800 in 2014 and the highest attendance figure since 2008 when the conference drew 3,900 attendees. The MBA forecast is based on the expected level of deal volume among mortgage banking firms.
“Commercial and multifamily real estate finance markets are strong,” says Jamie Woodwell, vice president of commercial real estate research for the MBA. “Rising property values, improving property fundamentals, lower interest rates and higher loan maturity volumes should all help boost mortgage borrowing and lending in the coming year.”
Multifamily mortgages originated by mortgage bankers are forecast to total $152 billon in 2015.
The commercial/multifamily mortgage debt outstanding is expected to continue growing in 2015, ending the year at $2.7 trillion, up more than 3 percent from the end of 2014, according to the MBA.
Strong Fourth-Quarter Finish
Commercial and multifamily mortgage originations increased 27 percent between the third and fourth quarters of 2014 and were up 11 percent compared with the same quarter of 2013, according to the MBA’s quarterly survey.
The 11 percent increase in the fourth quarter of 2014 was driven by an increase in loan originations for multifamily and industrial properties. By real estate sector, the increase included a 39 percent rise in the dollar volume of loans for multifamily properties, a 24 percent increase for industrial properties, 16 percent increase for retail properties, 11 percent increase for hotel properties, 2 percent increase for office property loans and an 8 percent decrease in healthcare property loans.
“The fourth quarter set record quarterly origination volumes for life insurance companies, for Fannie Mae and Freddie Mac, and for multifamily lending,” says Woodwell. He adds that despite a significant drop in the volume of loans maturing during the year, “the preliminary numbers show that every major investor group increased commercial and multifamily lending in 2014.”
The preliminary figures for all of 2014 compared with 2013 show that, among investor groups, loan originations for GSEs increased 33 percent, followed by CMBS loan originations (+20 percent), originations for commercial bank portfolios (+6 percent) and life company loan originations (+2 percent).
— Matt Valley