The companies intend to hold $50 to $120 billion multifamily mortgages
Life insurance companies have estimated that they could grow their multifamily lending volumes by roughly $10 billion in 2020.
The companies plan to hold $50 billion to $120 billion more in multifamily-backed loans over the next five years, according to data from the Mortgage Bankers Association’s (MBA) new study.
MBA surveyed 28 life insurance companies about their capacity to make multifamily-backed portfolio loans. The respondents said that they aim to close 36% more in multifamily loans in 2020 than they did in 2018.
Life insurance companies have been increasingly active in the past few years, making $83 billion in commercial and multifamily mortgage loans in 2018. These firms also held more than $500 billion in multifamily mortgages on their balance sheets.
MBA recorded $28 billion of multifamily originations from life insurance companies, which was nearly 10% of the total multifamily lending market and 34% of all life company commercial real estate lending.
"Life insurance companies report a strong appetite to make multifamily loans," said Jamie Woodwell, vice president of commercial real estate research at MBA. "The $10 billion in additional multifamily lending they seek would correspond to an over 30% increase in their multifamily lending volumes, and account for roughly 3% of the total multifamily lending market, based on 2018 figures."
MBA predicted that commercial and multifamily originations will reach a record $652 billion in 2019 and 2020, up 14% from 2018.
