Commercial and multifamily mortgage loan originations were 10 percent higher in the second quarter compared to a year ago, and rose 29 percent from the first quarter of 2019, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
"Falling long-term interest rates and sustained strength in commercial real estate markets lifted commercial and multifamily mortgage originations during the second quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Originations for life insurance companies and for Fannie Mae and Freddie Mac continued at record paces during the first half of the year, as did originations of loans backed by multifamily and industrial properties. With rates even lower during the third quarter, absent a major economic disruption, 2019 is shaping up to be another record year for commercial mortgage lending."
A rise in originations for health care, office, industrial and multifamily properties led the overall second quarter increase in commercial/multifamily lending volumes when compared to the second quarter of 2018.The second quarter saw a 151 percent year-over-year increase in the dollar volume of loans for health care properties, a 23 percent increase for office properties, a 16 percent increase for industrial properties and a 15 percent increase for multifamily properties. Retail property loan originations fell 32 percent, and hotel property lending decreased 28 percent.
Among investor types, the dollar volume of loans originated for Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) increased by 19 percent year-over-year, and 17 percent for commercial bank portfolio loans. There was a 4 percent decrease in life insurance company loans, and a 15 percent decrease in the dollar volume of Commercial Mortgage Backed Securities (CMBS) loans.
On a quarterly basis, second quarter originations for office properties increased 66 percent compared to the first quarter 2019. There was a 62 percent increase in originations for health care properties, a 32 percent increase for multifamily properties, an 18 percent increase for hotel properties, and a 15 percent increase for retail properties. Originations for industrial buildings declined 27 percent from the first three months of the year.
Among investor types, between the first and second quarter of the year, the dollar volume of loans for CMBS increased 58 percent, loans for GSEs increased 39 percent, originations for commercial bank portfolios increased 35 percent, and loans for life insurance companies increased by 9 percent.