MBA: Q1 Commercial Real Estate, Multifamily Mortgage Originations Rise 12 Percent, Sales Fall 9 Percent

WASHINGTON, D.C. — Commercial real estate loan originations rose 12 percent in the first quarter of 2019 compared with the same period a year ago, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The industrial sector climbed 73 percent in loan originations, followed by healthcare (41 percent) and hotels (14 percent). Retail and multifamily both saw increases (9 percent each), while the dollar volume of office property loans was unchanged.

“The momentum seen in 2018’s record year of borrowing and lending continued in the first quarter of this year,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “First-quarter volumes were higher for nearly every property type, and double-digit growth in loan volume for Fannie Mae and Freddie Mac led the increase among capital sources. Low interest rates and strong property values continue to make commercial real estate an attractive market for borrowers.”

While loan volumes ticked up, acquisitions across the four major property types fell 9 percent, says MBA. Apartment sales were roughly flat from last year, while office, retail and industrial property sales fell from 14 to 16 percent. The capitalization rates were flat from 2018 for industrial, retail and office, and apartment cap rates fell 20 basis points from 2018 to 5.4 percent.

Apartment asking rents saw the highest jump from 2018, rising 4.5 percent year-over-year. Office rents grew 2.2 percent and retail rents grew by 1.6 percent. Vacancy is up for all three property types as well, with apartment and office rates growing 10 basis points to 4.8 percent and 16.6 percent, respectively. Retail vacancy rates grew 20 basis points to 10.2 percent.

MBA is a national association based in Washington, D.C. Its membership of more than 2,300 companies includes mortgage companies, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies and others in the mortgage lending field.

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