CRE, multifamily lenders close record $574 billion in loans during 2018

Multifamily properties lead originations

The multifamily and commercial real estate lending business is booming.

Lenders in the commercial and multifamily space closed a record $573.9 billion in loans in 2018, according to the Mortgage Bankers Association’s 2018 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation, with an average loan size of $19 million. 

Multifamily properties saw the highest volume of mortgage bankers' origination volume by property type, at $266.4 billion, followed by office buildings, retail properties, industrial, hotel/motel and health care. MBA noted in its report that first liens accounted for 96% of the total dollar volume closed.

Additionally, the report states that commercial bank portfolios led the way as the top capital source for loans originated in 2018, responsible for $174 billion in originations.

The government-sponsored enterprises Fannie Mae and Freddie Mac ranked second for highest volume with $142.3 billion in originations, according to the report. Following the GSEs are commercial mortgage-backed securities issuers, life insurance companies and pension funds, and REITs, mortgage REITs and investment funds, according to the MBA.

MBA stated that 2018’s reported volume of both commercial and multifamily mortgages closed is an 8% increase from 2017’s reported volume. Additionally, the dollar volume of closed loans for repeat participants in the organization’s survey increased by 4% from 2017.

"Borrowing and lending backed by commercial and multifamily properties hit another new record last year," said Jamie Woodwell, MBA vice president of Commercial Real Estate Research. "Solid fundamentals, growing property values, low interest rates and strong appetites from both borrowers and lenders all helped drive an 8% increase in recorded multifamily lending from a year ago. Repeat participants in our survey increased their lending by 4% during 2018, with the remaining growth coming from the addition of new firms."

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