Multifamily and commercial mortgage originators are optimistic that 2022 will be another strong year of borrowing and lending, according to the 2022 Commercial Real Estate Finance Outlook Survey from the Mortgage Bankers Association (MBA).
Every top multifamily and commercial firm polled for the survey, which was conducted between Dec. 1 and Dec. 15, predicted that originations will grow this year, with 63% forecasting an overall increase of 5% or more across the market. When forecasting their own firm’s originations, 74% of respondents expect to see an increase in lending of 5% or more as well.
“Commercial and multifamily mortgage professionals are bullish on 2022,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “After a strong market bounce-back in 2021, top mortgage bankers expect the momentum to continue in 2022—with borrowing and lending increasing for every major capital source. Industry leaders are optimistic about changes coming from industrial, apartment, and retail market fundamentals, the broader economy, increased focus on ESG, and new construction activity. At the highest level, the market sees a strong availability of debt relative to the number of deals looking for it.”
All surveyed originators reported that lenders had a strong or very strong appetite to make new loans in 2021, which they expect to see again this year. In addition, originators reported that borrowers had strong or very strong appetites to take out new loans last year; 94% said they expect borrowers’ appetites to be strong or very strong in 2022.
According to the survey, loan returns generally are expected to stay muted and risks to hold steady this year. The majority of originators also expect upward pressure on interest rates and for cap rates to remain flat.
Looking ahead to the coming year, respondents cited several factors that could have a negative impact on the market.
“A majority of respondents see inflation, the trajectory of short- and long-term interest rates, legislative and regulatory changes, remote work’s impact on the office sector, and the ongoing pandemic as potential impacts on the industry during the year,” added Woodwell.
