MBA Reports Nearly 75% Jump in First Quarter 2022 Commercial Borrowing
Commercial and multi-family mortgages increased 72% in the first quarter of 2022 compared to the same period last year, according to the Mortgage Bankers Association‘s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. In line with seasonality trends, creations in the first three months of 2022 were 39% lower than in the fourth quarter of 2021.
“The strong momentum in commercial and multifamily borrowing and lending at the end of 2021 continued into the first quarter,” comments Jamie Woodwell, MBA’s vice president of commercial real estate research. “The continued growth in lending activity is the result of continued strong demand for certain property types such as industrial and multi-family properties, as well as renewed interest in other property types which have seen declines. more dramatic declines during the early stages of the pandemic, such as hotels and retail.”
“Rising interest rates are likely to slow borrowing over the next few quarters, but strong market fundamentals, real estate values and investor interest should continue to support the market,” Woodwell continued.
Compared to the previous year, an increase in originations for hotel, industrial and commercial properties led to the overall increase in commercial/multi-family loan volumes. By property type, hotels grew 359%, industrial grew 145%, retail grew 88%, healthcare properties grew 81%, multi-family grew 57% and office space increased by 30%.
Among investor types, dollar volume of loans to custodians increased 194% year-over-year. Life insurance company portfolios increased 81%, investor-focused lenders increased 77%, commercial mortgage-backed securities (CMBS) increased 56%, and government-sponsored companies (GSE – Fannie Mae and Freddie Mac) rose 1%.
As usual in the first quarter, mounts were down from the fourth quarter a year earlier, with total activity down 39%. Among property types, declines were seen in offices (48%), multi-family (41%), hotels (38%), retail (32%) and industrial (29%). Health care buildings increased by 17%.
Among investor types, CMBS loan dollar volume decreased 61%, custodian loans decreased 41%, GSE originations decreased 39%, investor-focused lenders decreased decreased by 30% and loans to life insurance companies decreased by 23%.
Read the full report here.