Report highlights significant increases
Commercial and multifamily mortgage loan originations increased by 3% in the second quarter of 2024 compared to the same period in 2023, according to the Mortgage Bankers Association (MBA). The MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations also revealed a 27% increase from the first quarter of 2024, marking significant growth driven by the single-asset single-borrower market.
Despite the overall increase, lending activity remains moderate, noted Jamie Woodwell, the MBA’s head of commercial real estate research. “Most capital sources remain ready, willing, and able to lend on properties that can support a loan,” Woodwell said. He highlighted substantial growth in originations for commercial mortgage-backed securities (CMBS) during the quarter.
Woodwell also pointed to the potential for further borrower activity in the upcoming quarters, citing moderating interest rates and the maturity of a significant number of loans.
Significant increases in originations
The survey revealed that the second quarter’s origination increases varied by property type. Loans for hotel properties saw a significant 172% year-over-year increase, followed by a 77% rise in loans for industrial properties and a 50% increase for health care properties. In contrast, loans for multifamily properties fell by 14%, office properties dropped by 29%, and retail properties saw a 7% decrease.
Among investor types, CMBS experienced a substantial 154% increase in loan volume year-over-year. Investor-driven lenders saw a 17% rise, and life insurance company loans increased by 11%. However, loans from depositories decreased by 26%, and those for government-sponsored enterprises (GSEs), including Fannie Mae and Freddie Mac, declined by 20%.
On a quarter-over-quarter basis, originations for health care properties surged 178% from the first quarter to the second quarter of 2024. Hotel property originations grew by 84%, industrial properties by 29%, and multifamily properties by 27%. Retail property loans rose by 18%, while office property originations saw a modest 4% increase.
For investor types, life insurance companies experienced a 60% jump in loan volume between the first and second quarters. Depositories saw a 21% increase, while both CMBS and investor-driven lender originations rose by 21% and 20%, respectively. Loans for GSEs increased by 16% during the same period.
As the market continues to adapt to evolving conditions, further shifts in borrowing trends may emerge in the coming quarters.
Do you have something to say about this update? Let us know in the comments below.
