WASHINGTON (November 3, 2020)—Commercial and multifamily mortgage loan originations were 47% lower in the third quarter compared to a year ago, and increased 12% from the second quarter of 2020, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
"Borrowing and lending backed by commercial and multifamily mortgages remained subdued during the third quarter," said Jamie Woodwell, MBA's vice president of commercial real estate research. "Every major property type and capital source recorded a decline compared to last year's third quarter. Originations backed by industrial and multifamily properties saw smaller declines than other property types, with multifamily lending buoyed by loans made for Fannie Mae, Freddie Mac and FHA."
Originations Decrease 47% in Q3 2020
All property types showed a decline in the third quarter in commercial/multifamily lending volumes when compared to the third quarter of 2019. The third quarter saw a 94% year-over-year decrease in the dollar volume of loans for hotel properties, an 83% decrease for retail properties, a 58 percent decrease for office properties, a 51% decline for health-care properties, a 31% decrease in multifamily properties, and a 23% decrease for industrial property loan originations.
Among investor types, the dollar volume of loans originated for commercial bank portfolio loans declined by 68% year-over-year. There was a 58% decrease for commercial mortgage-backed securities (CMBS), a 55% decrease in life insurance company loans, and an 8% decrease in the dollar volume of government-sponsored enterprises (GSEs - Fannie Mae and Freddie Mac) loans.
Q3 Originations Up 12% from Q2 2020
On a quarterly basis, third quarter originations for industrial properties increased 67% compared to the second quarter 2020. There was a 35% increase in originations for office properties, a 32% increase for health-care properties and a 4% increase for multifamily properties. Originations for retail properties decreased 27%, and originations for hotel properties declined 45%.
Among investor types, between the second and third quarter of this year, the dollar volume of loans for CMBS increased 749 percent, loans for GSEs increased 3%, originations for life insurance companies decreased 9%, and the dollar volume of loans for commercial bank portfolios decreased last quarter, by 21%.
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