Commercial and Multifamily Originations Show Slight Increase

November 1, 2016
The delinquency rate for U.S. commercial real estate loans in commercial mortgage-backed securities (CMBS) reached the 5.03 percent level last month, according to new data from Trepp LLC

Commercial and multifamily mortgage loan originations for the first nine months of 2016 were two percent higher than the same period a year ago, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The MBA also reported that commercial/multifamily mortgage originations during the third quarter were seven percent above the second quarter’s level and five percent higher from a year ago.

Among the different sectors in this market, there was a 32 percent year-over-year increase in dollar volume of loans for industrial properties and a 26 percent increase for multifamily properties. However, the market also saw a five percent drop for office properties, a 23 percent decrease for retail properties, a 30 percent decline in hotel property loans and a 59 percent plummet in health care property loans.

Among investor types, the dollar volume of loans for commercial mortgage-backed securities (CMBS) increased by 96 percent from the second quarter to the third quarter, while loans for the government-sponsored enterprises (GSEs) were up by 35 percent. But originations for life insurance companies were down by four percent and loans for commercial bank portfolios fell by 25 percent.

"Rising property values, robust property fundamentals, low interest rates and a strong transaction market continue to drive potentially record setting paces in commercial and multifamily mortgage originations," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Originations for bank balance sheets, life companies and Fannie Mae and Freddie Mac are all running ahead of last year's record paces. And after a slow start to the year, the commercial mortgage backed securities market also saw a pick-up in the third quarter."