Commercial and multifamily lenders had another banner year in 2018, when closed-loan originations rose 8% to a high of $574 billion.
“Borrowing and lending backed by commercial and multifamily properties hit another new record last year,” said Jamie Woodwell, vice president of commercial real estate research at the Mortgage Bankers Association.
“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.”
Commercial bank portfolios provided the most capital to the market, representing $174 billion or nearly one-third of the total. Government-sponsored enterprises Fannie Mae and Freddie Mac were responsible for more than $142 billion or nearly one-fourth of the total.
“Many capital sources rose to record levels of lending — including bank portfolios, life insurance companies and the GSEs,” Woodwell said. “Among property types, multifamily pulled even further ahead as the dominant lending target, growing to 46% of total mortgage banker lending — a series high.”
Office was the next largest property type after multifamily, representing 18% of the total. Retail, hotel/motel and industrial property types each represented 8% of the market for a combined 24% market share. Health care loans represented 2% of the market.
The previous record for commercial real estate and multifamily loans closed in a year was $530 billion, according to the MBA.