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Multifamily, commercial mortgage loans stall out in 1Q2014

MBA survey shows dramatic multifamily and retail slowdowns

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Commercial and multifamily mortgage loan originations in the first quarter of 2014 were 1% lower than during the same period last year and 45% lower than the fourth quarter of 2013, according to the Mortgage Banker’s Association’s survey of originations.

“Commercial and multifamily borrowing typically starts the year slowly, with less than one-fifth of the annual volume usually done in the first quarter,” said Jamie Woodwell, MBA’s vice president of commercial real estate research.  “This year is looking to continue the trend."

According to the MBA report, lending by banks and life companies increased compared to last year’s first quarter, but first quarter originations for Fannie Mae and Freddie Mac and for inclusion in commercial mortgage-backed securities were lower than during the same period last year.  Taken together, commercial and multifamily mortgage originations started 2014 at the same pace they started 2013.

The 1% overall decrease in commercial/multifamily lending volumes, when compared to the first quarter of 2013, was driven by the decrease in originations for retail and multifamily properties.  The decrease included a 19% decrease in the dollar volume of loans for retail properties, a 17% decrease for multifamily properties, a 10% increase for health care properties, a 15% increase for office properties, a 44% increase in hotel property loans, and a 52% increase in industrial property loans.

Among investor types, the dollar volume of loans originated for government sponsored enterprises decreased by 55% from last year’s first quarter.

First quarter 2014 commercial and multifamily mortgage originations were 45% lower than in the fourth quarter of 2013.  Compared to the fourth quarter of 2013, first quarter 2014 originations for health care properties decreased 65%. 

There was a 44% decrease for multifamily properties, and a 24% decrease for industrial properties from the fourth quarter 2013 to the first quarter 2014.

Among investor types, loans for GSEs decreased 53%.

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