WASHINGTON, D.C. — Commercial and multifamily loan originations climbed 7 percent year-over-year in fourth-quarter 2019, according to preliminary estimates from the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The results were released Sunday at the 2020 Commercial Real Estate Finance/Multifamily Housing Convention & Expo in San Diego. The four-day conference began Sunday and will conclude Wednesday.
The industrial, office and healthcare sectors experienced increases in dollar volume of loans in the latter part of 2019. Compared to fourth-quarter 2018, the industrial sector grew by 67 percent, the healthcare sector was up 33 percent and office properties ticked up 29 percent. Multifamily property loan originations decreased 4 percent, and hotel property lending fell 25 percent.
Among investor types, the dollar volume of loans originated by commercial mortgage-backed securities (CMBS) lenders increased year-over-year by 81 percent, 13 percent for commercial bank portfolio loans and 9 percent for life insurance companies. The dollar volume of government-sponsored enterprises (i.e. Fannie Mae and Freddie Mac) loans decreased 30 percent compared to the fourth quarter of 2018.
“Commercial and multifamily borrowing and lending hit a new high during the fourth quarter of 2019, surpassing the previous record from the second quarter of 2007,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “A pullback in lending by Fannie Mae and Freddie Mac suppressed multifamily borrowing during the quarter, but growth for most other property types made up the difference. Initial indications are that 2019 set new records, with double-digit growth in mortgage bankers originations, as well as new highs in originations for banks and life insurance companies.”
MBA predicts that total mortgage originations were up 13 percent in 2019 compared to 2018. By property type, originations for healthcare properties increased 92 percent from 2018, 50 percent for industrial properties, 23 percent for office properties and 8 percent for multifamily properties. Retail property originations decreased 6 percent, and hotel properties saw a decline of 19 percent.
In late March, MBA will release its Annual Origination Summation report for 2019 with final origination figures for the year.
— Alex Tostado