Commercial/Multifamily Borrowing Jumped 79 Percent To New Record In Q4 Of 2021

Commercial and multifamily mortgage loan originations were 79 percent higher in the fourth quarter of 2021 compared to a year ago, and increased 44 percent from the third quarter of 2021.

“The fourth quarter of 2021 was a record end to a record year of borrowing and lending backed by commercial and multifamily properties,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Part of the growth from 2020 was a bounce-back from the worst of the recession. However, rebounding property fundamentals and strong valuations, record sales transaction volumes, and low interest rates all fueled commercial and multifamily borrowing and lending activity that easily outpaced previous periods.”

ORIGINATIONS INCREASE 79 PERCENT IN THE FOURTH QUARTER OF 2021

Increases in originations for hotel, office, industrial, and retail properties led the overall jump in commercial/multifamily lending volumes when compared to the fourth quarter of 2020. There was a 167 percent year-over-year increase in the dollar volume of loans for hotel properties, a 122 percent increase for office properties, a 113 percent increase for industrial properties, a 109 percent increase for retail properties, and a 57 percent increase for multifamily properties. Health care property loan originations decreased 17 percent compared to the fourth quarter of 2020. 

Among investor types, the dollar volume of loans originated for Commercial Mortgage-Backed Securities (CMBS) increased by 305 percent year-over-year. There was a 211 percent increase for investor-driven lenders, a 147 percent increase in commercial bank portfolio loans, a 63 percent increase for life insurance company loans, and a 30 percent decrease in the dollar volume of Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) loans.

FOURTH QUARTER ORIGINATIONS UP 44 PERCENT FROM THE THIRD QUARTER OF 2021

On a quarterly basis, fourth-quarter originations for industrial properties jumped 96 percent compared to the third of quarter 2021. There was a 42 percent increase in originations for hotel properties, a 39 percent increase for office properties, a 35 percent increase for multifamily properties, originations for retail increased 6 percent, and originations for health care properties increased 2 percent.

Among investor types, between the third and four quarter of 2021, the dollar volume of loans for CMBS increased 144 percent, loans for commercial bank portfolios increased 59 percent, originations for investor-driven lenders increased 42 percent, loans for life insurance companies increased 18 percent, and the dollar volume of loans for GSEs increased by 2 percent.

PRELIMINARY 2021 ORIGINATIONS 67 PERCENT HIGHER THAN 2020

A preliminary measure of commercial and multifamily mortgage bankers’ originations volumes shows activity in 2021 was 67 percent higher than in 2020. By property type, originations for industrial properties increased 140 percent from 2020, retail properties increased 73 percent, hotel properties increased 71 percent, office properties increased 66 percent, health care properties increased 56 percent, and multifamily property originations increased 54 percent.

Among investor types from 2021 compared to 2020, loans for investor-driven lenders increased 225 percent, originations for CMBS increased 167 percent, loans for commercial bank portfolios increased 83 percent, and loans for life insurance companies increased 76 percent. GSE loans decreased 17 percent.