Have Commercial and Multifamily Loan Originations Plateaued?

Commercial and multifamily mortgage loan originations were essentially unchanged in Q1 of 2024 compared to a year ago, and decreased 23% from Q4 of 2023, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

“Borrowing and lending backed by commercial real estate properties remained muted in the first quarter of 2024,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “Elevated interest rates and uncertainty about their direction have kept many current owners on the fence, with little commending a sale or refinance unless something forces the issue.”

Woodwell continued, “With loan maturities and other triggers increasingly likely to prompt action, property owners, potential owners, lenders, and others are all working through the specifics of each individual property to identify the level of mortgage debt that property can support. New loan originations should follow as this continues.”

Mortgage Originations Remain Unchanged from Q1 of 2024

Originations in Q1of 2024 varied across the different property types. There was a 31% year-over-year decrease in the dollar volume of loans for retail properties, a 22% decrease for health care properties, a 21% decrease for office properties, and a 7% decrease for multifamily properties. Hotel property originations increased 8% and there was a 63% increase for industrial properties.

Among investor groups, the dollar volume of loans originated for depositories fell 41% year-over-year. Loans from government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac fell by 17%, while loans from life insurance companies increased by 35%, investor-driven lender loans increased by 41%, and commercial mortgage-backed securities (CMBS) loans increased by 93%.

Q1 Originations down from Q4 of 2023

In Q1 2024, originations for health care properties fell 56% from Q4 2023. Originations for retail properties declined by 49%, hotel properties by 37%, multifamily properties by 29%, and office properties by 3%. The dollar volume of loans for industrial assets increased by 12%.

Between Q4 of 2023 and Q1 of 2024, the dollar volume of loans for life insurance firms declined 37%, deposits decreased 36%, GSE originations decreased 30%, and investor-driven lenders decreased 18%. The monetary amount of CMBS loans has surged by 57%.

To read the full report, including more data, charts, and methodology, click here.

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Demetria C. Lester

Demetria C. Lester is a reporter for MortgagePoint (formerly DS News and MReport) with more than eight years of writing and editing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is a jazz aficionado, Harry Potter fanatic, and likes to read. She can be reached at demetria.lester@thefivestar.com.
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