According to the Mortgage Bankers Association’s (MBA) 2024 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation, total commercial real estate (CRE) mortgage borrowing and lending is estimated to have totaled $498 billion in 2024, a 16% increase from the $429 billion in 2023, and a 39% decrease from $816 billion in 2022.
MBA’s survey tracked $411 billion of loans closed by dedicated commercial mortgage bankers in 2024–a 34% increase from the $306 billion reported in 2023. Activity from smaller and mid-sized depositories is estimated from other data sources to arrive at the $498 billion estimate for the total market.
“Commercial real estate lending rebounded to $498 billion in 2024, up 16% from the prior year, and driven largely by multifamily activity and continued strength from dedicated mortgage banking firms, which closed $411 billion in loans,” said Reggie Booker, MBA’s Associate VP of Commercial Real Estate Research. “While still below 2021’s record originations activity, the market showed renewed momentum. With an estimated $957 billion in CRE mortgage maturities coming due this year, demand for refinancing and new capital will be key drivers of market activity.”
Among different property types, multifamily properties saw the highest volume last year, with an estimated $326 billion of total lending and $219 billion directly tracked by dedicated mortgage bankers. First liens accounted for 92% of the mortgage bankers’ dollar volume closed.
Dedicated mortgage banking firms reported closing $411 billion of CRE loans in their own names and serving as intermediaries on $303 billion. Firms reported serving as investment sales brokers for $247 billion of deals.
Depositories were the leading capital source for CRE mortgage debt, followed by life insurance companies and pension funds, private label CMBS, government-sponsored enterprises (Fannie Mae and Freddie Mac), and investor-driven lenders.
The CBRE Lending Momentum Index, which tracks the pace of CBRE-originated commercial loan closings in the U.S., rose by 21% from Q3 2024 and 37% year-over-year, reflecting a strong recovery in lending activity. Commercial real estate lending momentum accelerated in the fourth quarter of 2024, supported by a substantial wall of capital and strong fundamentals across most sectors, with maturing debt expected to drive further improvement in 2025, according to the latest research from CBRE.
In Q4 2024, the average spread on closed commercial mortgage loans was 184 basis points (bps), representing a 49 bps decline year-over-year and a one bps increase from Q3 2024. Spreads on multifamily loans narrowed by 12 bps during the quarter to 156 bps, marking the tightest spreads since Q1 2022, primarily due to compression in agency loan spreads.
“While there was an uptick in market activity in the fourth quarter, the 80 bps shift in 10-year Treasury rates and revised rate expectations, led to recalibrations in credit and equity, resulting in the deferral of some deals. Despite this, a substantial wall of capital continues to support competitive spreads across a wide spectrum of credit markets, from CMBS SASB and Conduit to CLOs, Agency, LifeCo, Bank, Repo, and Debt Funds,” said James Millon, U.S. President of Debt & Structured Finance for CBRE. “Looking ahead to 2025, we expect a more dynamic refinancing and investment sales market, fueled by maturing debt, capital reallocation in closed-end funds, and strong fundamentals across most real estate sectors. We are particularly optimistic about the resurgence of the office occupier market for top-tier assets in major CBDs. Lenders are likely to leverage loan sales to create liquidity for strategically positioned assets and asset management-intensive properties approaching restructured maturity extensions, allowing them to navigate the evolving market landscape.”
