Third-quarter 2014 commercial and multifamily mortgage loan originations were 16% higher than a year earlier and 18% higher than in the second quarter, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
“Commercial real estate borrowing and lending continued at a strong clip in the third quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Low rates, coupled with growth in property incomes, property values and sales transactions, have pushed year-to-date commercial and multifamily mortgage originations 5% above last year’s pace.”
The 16% overall increase in commercial/multifamily lending volumes compared with the third quarter of 2013 was driven by increased originations for industrial and multifamily properties. The increase included a 41% increase in the dollar volume of loans for multifamily properties, a 22% increase for industrial properties, an 11% increase for office properties, an 11% increase for retail properties, a 4% increase in hotel property loans, and a 43% decrease in healthcare property loans.
Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (or GSEs — Fannie Mae and Freddie Mac) increased 118% from last year’s third quarter. There was a 47% increase for CMBS loans, a 1% increase for life insurance company loans, and a 16% decrease in dollar volume for commercial bank portfolio loans.
Among investor types, year-to-date 2014 versus year-to-date 2013, loans for CMBS increased 28%, loans for commercial bank portfolios increased 14%, originations for GSEs increased 3%, and loans for life insurance companies decreased 1% year-to-date 2014 versus year-to-date 2013.
“CMBS had a strong showing in the third quarter, outpacing life and community bank originations,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “However, Fannie Mae and Freddie Mac remain formidable competitors in the multifamily space as evidenced by strong production in the third quarter.”