Commercial mortgage loans jump 8 percent in third quarter

Commercial and multifamily mortgage loan originations were up 8 percent in the third quarter, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

They were also up 21 percent in the third quarter compared to the same period last year.

“Borrowing and lending associated with commercial and multifamily real estate increased again in the third quarter, even as sales transaction volume slowed,” Jamie Woodwell, vice president of commercial real estate research at MBA, said. “Most property types and capital sources saw stronger lending activity than a year earlier, supported by solid property fundamentals and continued property value appreciation.”

Originations for health care properties increased 120 percent in the third quarter. Further, there was a 12 percent jump for multifamily properties, a 10 percent rise for retail properties, and a 6 percent increase for hotels. However, there was a 4 percent decrease in office properties and a 25 percent drop in industrial properties. Also, the dollar volume of loans for government-sponsored entities increased 31 percent, while loans for commercial bank portfolios increased 15 percent.

Compared to the third quarter of 2016, lending volumes jumped 116 percent for hotel properties, 97 percent for health care properties, 20 percent for industrial properties, 15 percent for multifamily properties, and 8 percent for office property loans. Retail property loans were down 8 percent.

The dollar volume of loans originated for Commercial Mortgage Backed Securities (CMBS) loans increased by 42 percent year-over-year, while there was a 22 percent year-over-year increase for GSEs and a 21 percent increase for commercial bank portfolio loans.