Commercial and multifamily mortgage originations experienced a 27 percent surge between the third and fourth quarters of 2014, according to the Mortgage Bankers Association (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Additionally, mortgage origination for the fourth quarter of 2014 were 11 percent higher than the same period in 2013.
“Commercial and multifamily mortgage markets ended the year strong,” said Jaime Woodwell, MBA’s vice president of Commercial Real Estate Research. “With low interest rates, rising property values and improving property fundamentals – and in spite of a significant drop in in the volume of loans maturing during the year – the preliminary numbers show every major investor group increased commercial and multifamily lending in 2014.”
The 11 percent surge in commercial and multifamily lending when compared with the fourth quarter numbers for 2013 was mainly driven by an increase in originations for multifamily and industrial properties. The increase included a 39 percent increase in the dollar volume of loans for multifamily properties, as well as a 24 percent increase for industrial properties, a 16 percent increase for retail properties and an 11 percent increase for hotel properties.
Additionally, $121 billion of outstanding commercial and multifamily mortgages held by non-bank lenders and investors will mature in 2015, according to the MBA 2014 Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes. This is a 32 percent increase from the $91.7 billion that matured in 2014. Maturities will grow to $233 billion in 2016.
“After hitting a low last year, commercial and multifamily mortgage maturities are beginning to rise as the 10-year loans made in 2005, 2006 and 2007 come due,” Woodwell, said. “With strong market conditions, many of the commercial loans slated to mature in coming years are already refinancing. Over the last year, the balance of loans set to mature in 2015 fell by $37 billion, or 24 percent.”