Commercial/Multifamily Borrowing Up 19 Percent Year-Over-Year In The Second Quarter of 2022

Commercial and multifamily mortgage loan originations increased 19 percent in the second quarter of 2022 compared to the same period last year, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

”Borrowing and lending backed by commercial real estate set another quarterly record from April through June, although the pace of increase slowed from the first quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Property owners, investors, and lenders continue to work through broader economic uncertainty that is affecting the space, equity, and debt markets. MBA is forecasting that borrowing and lending will slow during the second half of the year. That said, improvements in fundamentals and values in recent years provide significant support to properties with outstanding loans and continued financing opportunities for properties whose cash flows can support debt.”

SECOND-QUARTER 2022 ORIGINATIONS INCREASED 19 PERCENT COMPARED TO SECOND QUARTER 2021

Compared to a year earlier, a rise in originations for retail, hotel, and multifamily led the overall increase in commercial/multifamily lending volumes. By property type, retail increased by 108 percent, hotels increased by 37 percent, multifamily increased 24 percent, industrial increased 3 percent, office decreased 11 percent and health care decreased by 3 percent.

Among investor types, the dollar volume of loans originated for depositories increased by 102 percent year-over-year, government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) increased 29 percent, and investor-driven lenders increased 12 percent. Commercial Mortgage-Backed Securities (CMBS) decreased 57 percent and lending for life insurance company portfolios decreased 5 percent.

SECOND-QUARTER 2022 ORIGINATIONS UP 15 PERCENT FROM FIRST QUARTER 2022

On a quarterly basis, second quarter originations for retail properties increased 79 percent compared to the first quarter 2022. There was a 70 percent increase in originations for health care properties, an 18 percent increase for multifamily properties, a 14 percent increase for office properties, a 2 percent decrease for hotel properties, and originations for industrial properties decreased 26 percent.

Among investor types, the dollar volume of loans for depositories increased 42 percent, investor-driven lenders increased 20 percent, originations for GSEs increased 18 percent, and life insurance company loans increased 2 percent. Commercial Mortgage-Backed Securities (CMBS) decreased 52 percent.