Commercial and multifamily mortgage originations during the second quarter experienced a 28 percent spike from the first quarter and a 20 percent boost from one year earlier, according to new data from the Mortgage Bankers Association (MBA)
The industrial and office sectors fueled the second quarter activity, with a 91 percent year-over-year increase in dollar volume of loans for industrial properties and a 33 percent increase for office properties. Multifamily properties saw a 21 percent annual increase, while hotel properties recorded a 14 percent increase and health care properties enjoyed a seven percent upswing. Retail properties, however, recorded a nine percent decline.
Among investor types, dollar volume of loans originated for commercial mortgage-backed securities loans increased by 168 percent year-over-year. This was far ahead of the 26 percent year-over-year increase for government-sponsored enterprises (Fannie Mae and Freddie Mac) loans. Life insurance loans saw a two percent decrease, while a 21 percent drop was seen in the dollar volume of commercial bank portfolio loans.
"Borrowing and lending backed by commercial and multifamily properties has been strong the first half of this year," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "Reflecting broad industry trends, borrowing backed by industrial properties increased by two-thirds compared to the first half of 2016, while borrowing backed by retail properties dropped by one-sixth. As was the case during the first quarter, commercial/multifamily mortgage bankers' originations increased despite a slowdown in the volume of sales transactions."