U.S. Commercial, Multifamily Lending Jumps 34% Over Q1

Posted on August 1, 2014

According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, second quarter 2014 commercial and multifamily mortgage loan originations were two percent lower than during the same period last year, but 34 percent higher than the first quarter of 2014.

“Year-to-date borrowing by commercial and multifamily real estate owners is running at the same pace as last year,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.  “Low interest rates and improving property fundamentals are prompting borrowers to act, but the relatively low volume of loans hitting maturity is checking overall demand.”

Second Quarter 2014 Originations Two Percent Lower than Second Quarter 2013

The two percent overall decrease in commercial/multifamily lending volumes, when compared to the second quarter of 2013, was driven by a decrease in originations for retail and multifamily properties.  The decrease included a 10 percent decrease in the dollar volume of loans for retail properties, a 10 percent decrease for multifamily properties, a 6 percent decrease for office properties, a 20 percent increase for industrial properties, a 45 percent increase in hotel property loans, and a 95 percent increase in health care property loans.

Among investor types, the dollar volume of loans originated for the Government Sponsored Enterprises (or GSEs – Fannie Mae and Freddie Mac) decreased by 13 percent from last year’s second quarter.  There was a 13 percent decrease for life insurance company loans, a 19 percent increase for commercial bank portfolio loans and a 45 percent increase in dollar volume for CMBS loans.

Second Quarter 2014 Originations Up 34 Percent from First Quarter 2014

Second quarter 2014 commercial and multifamily mortgage originations were 34 percent higher than in the first quarter.  Compared to the first quarter of 2014, second quarter originations for hotel properties increased 91 percent.  There was a 78 percent increase in originations for health care properties, a 64 percent increase for retail properties, a 44 percent increase for office properties, a 32 percent increase for multifamily properties, and a 13 percent increase for industrial properties from the first quarter.

Among investor types, between the first and second quarters of 2014, the dollar volume of loans for CMBS increased 132 percent, loans for GSEs increased 99 percent, originations for life insurance companies increased 47 percent, and loans for commercial bank portfolios decreased by 12 percent.