Commercial and multifamily borrowing saw a 19% increase in the second quarter compared with a year ago and a quarter-over-quarter increase of 15%, according to the Mortgage Bankers Association (MBA).
For multifamily properties specifically, the MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations showed a 24% year-over-year increase in lending volumes in the second quarter. The multifamily sector saw an 18% quarter-over-quarter increase.
“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.”
According to the MBA, originations for multifamily as well as retail and hotel, increasing 108% and 37%, respectively, led the overall year-over-year commercial/multifamily lending volumes. Industrial originations saw a 3% increase, but office and health care decreased by 11% and 3%, respectively, year over year.
On a quarterly basis, according to the MBA, retail originations rose 79%, health care increased 70%, and office was up 14%. Originations for hotel and industrial properties were down 2% and 26%, respectively, in the second quarter.
The dollar volume of loans originated for depositories increased 102% year over year, followed by a 29% increase for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and a 12% increase for investor-driven lenders. Commercial mortgage-backed securities (CMBS) decreased 57% and lending for life insurance company portfolios declined 5% on a year-over-year basis.
Quarter over quarter, the dollar volume of loans in the second quarter for depositories increased 42%, with originations for investor-driven lenders and GSEs increasing 20% and 18%, respectively. Life insurance company loans increased 2%, while CMBS experienced a 52% drop.
