WASHINGTON, D.C. — The Mortgage Bankers Association (MBA) projects commercial and multifamily mortgage originations will decline slightly in 2018, ending the year at $549 billion, down 3 percent from 2017. Looking further into its crystal ball, MBA forecasts origination volume to remain relatively flat in 2019.
“There is a strong mix of both headwinds and tailwinds in the commercial real estate finance markets right now,” says Jamie Woodwell, vice president of commercial real estate research at MBA, a national real estate finance association based in Washington, D.C. “Our sense is that for commercial and multifamily mortgage borrowing and lending, the net effect is likely to be close to a wash.”
Jamie Woodwell, MBA
Rising interest rates, slowing NOI growth, pressure on capitalization rates and fewer loan maturities are some of the factors that will be holding the real estate finance markets back, points out Woodwell.
At the same time, continued economic growth, large amounts of investment capital looking for a home, plus the recent passage of the Tax Cuts and Jobs Act, may all propel the transaction markets forward, adds the veteran researcher.
“The magnitude and opposing impacts of some of these changes, however, raises the level of uncertainty,” emphasizes Woodwell.
Meanwhile, commercial/multifamily mortgage debt outstanding is projected to increase by more than 7 percent in 2018.
Total commercial/multifamily debt outstanding stood at $3.11 trillion at the end of the third quarter of 2017 (the most recent data available).
— Matt Valley