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Commercial Mortgage Originations Climb in Third Quarter

As the economy continues to improve and the Federal Reserve considers a rate increase, the commercial mortgage industry continues to make gains. According to data from the Mortgage Bankers Association, the third quarter saw a 12% increase in originations in the commercial and multifamily mortgage sectors compared to the third quarter of 2014. Originations were 3% higher than in the second quarter of this year.

“Commercial mortgage borrowing and lending continued to grow during the third quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Every major investor group and property type except one has seen increases in year-to-date lending volumes, and we expect year-end numbers to continue that trend.”

Increases in dollar volume for retail and office properties were a major part of the 12% year-over-year increase, with retail originations increasing 39% and office originations increasing 17%. Multifamily and industrial properties also saw strong year-over-year increases at 11% and 10%, respectively.

The 3% quarterly rise in originations was chiefly driven by increases in originations for office and retail properties. Mortgage originations for office properties were up 37% from the second quarters and retail rose 27 percent. Health care properties also saw a 5% increase in originations from the second quarter of 2015.

With this increase in originations, now is a great time to begin working as a commercial mortgage broker. While many brokers who are just starting out in the commercial industry often focus on multifamily and mixed-use properties, the MBA data is a good indication that now is a great time to focus some of your efforts on closing commercial mortgages for office and retail properties.

If you’re a mortgage broker considering closing commercial mortgages, consider working with non-bankable borrowers and small-balance commercial mortgage lenders. This is a great way to get started in the commercial industry and allows you to earn additional income while allowing you to continue handling residential business.

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