According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, originations of commercial and multifamily mortgage loans rose by 59% in the third quarter of 2024 compared to the same period last year and by 44% 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,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “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.”
Woodwell continued, “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.”
Originations Jump Nearly 60% in Q3
In the third quarter of 2024, originations differed depending on the type of property. The dollar volume of loans for health care buildings increased by 510 percent, hotel properties by 99 percent, retail properties by 82 percent, industrial properties by 57 percent, and multifamily properties by 56 percent over the same period last year. Originations of office property fell 3%.
The dollar volume of loans originated for commercial mortgage-backed securities (CMBS) rose by 260 percent year over year among all investor groups. Depository loans increased by 69 percent, investor-driven lender loans increased by 62 percent, life insurance company loans increased by 31 percent, and government-sponsored enterprise (GSE) loans (Fannie Mae and Freddie Mac) increased by 28 percent.
Q3 Originations Up 44% from Q2 of 2024
When comparing the third quarter of 2024 to the second quarter, originations for health care properties rose 191% on a quarterly basis. Retail property originations climbed by 56%, multifamily property originations increased by 53%, office property originations increased by 42%, and industrial property originations increased by 21%. Loans for hotel buildings saw a 25% decline in dollar volume.
The dollar volume of loans for depositories, GSEs, life insurance companies, investor-driven lenders, and CMBS increased by 86 percent, 55 percent, 21 percent, and 12 percent, respectively, between the second and third quarters of 2024.
To read the full report, including more data, charts, and methodology, click here.
