A new survey from the Mortgage Bankers Association (MBA) shows that commercial and multifamily mortgage loan originations increased 59 percent in the third quarter of 2024 compared to a year ago.
The MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations also found that originations increased 44 percent from the second quarter of 2024.
“After a slow start to the year, borrowing and lending backed by commercial real estate properties picked up during the third quarter,” Jamie Woodwell, MBA’s head of commercial real estate research, said. “Lower interest rates were a key driver of the increase, with the yield on the Ten-year Treasury bond dropping during the quarter from an average of 4.31 percent in June to 3.72 percent in September. Long-term rates have increased more recently, which could slow last quarter’s momentum.”
Originations in the quarter varied across the different property types. Specifically, there was a 510 percent year-over-year increase in the dollar volume of loans for health care properties, a 99 percent increase for hotel properties, an 82 percent increase for retail properties, a 57 percent increase for industrial properties, and a 56 percent increase for multifamily properties. Office property originations dropped 3 percent.
“Each property and loan is unique and faces a different situation depending on its property type, market, submarket, vintage, business plan and more. All those factors will play a role in the volume of borrowing/lending in coming quarters,” Woodwell added.
Further, the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) increased by 260 percent from the third quarter of 2023. In addition, there was a 69 percent year-over-year increase for depository loans, a 62 percent increase for investor-driven lender loans, a 31 percent increase in loans for life insurance companies, and a 28 percent increase for government sponsored enterprises loans.
Compared to the second quarter, originations for health care properties increased 191 percent, retail properties rose 56 percent, multifamily properties jumped 53 percent, office properties climbed 42 percent increase, and industrial properties increased 21 percent. The dollar volume of loans for hotel properties decreased 25 percent.
Also, the dollar volume of loans for depositories increased 86 percent compared to Q2, while loans for GSEs increased 55 percent, originations for life insurance companies increased 40 percent, loans for investor-driven lenders increased 21 percent, and the dollar volume of loans for CMBS jumped by 12 percent.