Commercial and Multifamily Originations Flatline in Q1

The first quarter of this year was something of a dud for commercial and multifamily originations, according to new data from the Mortgage Bankers Association (MBA).

The MBA Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations found originations for this sector fell by 38 percent from the fourth quarter of 2015. Among different segments, first quarter originations for health care properties plummeted by 62 percent compared to the fourth quarter, while originations for hotel properties and industrial properties each took a 57 percent dive. Originations on retail properties fell 46 percent from the previous quarter, while multifamily properties sank 39 percent and office properties tumbled 23 percent.

However, commercial/multifamily lending volumes were mostly up on a year-over-year basis, with spikes in the retail (44 percent), office properties (18 percent), hotel (three percent) and multifamily (two percent) segments. Decreases were seen in lending volumes for health care properties (down 57 percent) and industrial properties (down 56 percent).

MBA Vice President of Commercial Real Estate Research Jamie Woodwell emphasized the stronger aspects of the new data.

"In the aggregate, commercial real estate borrowing and lending started 2016 in a similarly strong fashion to 2015," said Woodwell. "Borrowing backed by retail, office, hotel and multifamily properties picked up, as did lending by banks. Disruptions in the broader capital markets pushed originations for commercial mortgage-backed securities down."