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Take Advantage of the Positive Outlook for Commercial Mortgages

Originators of commercial and multifamily mortgages expect another strong year according to MBA’s 2018 CREF Outlook Survey. Originations are expected to increase by 78% of the top commercial/ multifamily firms surveyed, and nearly a quarter of those firms expect an overall increase of 5% or more across the entire market. When asked about their own firm’s originations, nearly half expect an increase of 5% or more this year.

“Mortgage bankers look to 2018 as another growth year for the commercial and multifamily mortgage markets,” said Jamie Woodwell, MBA’s Vice President for Commercial Real Estate Research and Economics. “The majority of top firms expect a ‘very strong’ appetite from lenders and a ‘strong’ appetite from borrowers to drive commercial mortgage originations higher. Tax reform and regulatory relief are expected to benefit the overall market, though rising rates are expected to be a drag. The outlook mirrors much of what we saw in their 2017 outlook.”

So, what can brokers do to take advantage of this opportunity? Here are some tips:

Build relationships with commercial lenders.

Before you seek out leads, you need to contact lenders and work with them to develop a partnership. Get an understanding of their products and requirements, and ask questions about what they expect from their brokers.

Talk to your referral sources.

Your referral network will continue to play a large role in your success as a broker. Be sure to contact them and let them know you can get their clients commercial financing now. Emphasize how your services will help their relationship with clients.

Seek out commercial borrowers.

Whether it’s through digital means such as social media, email blasts or your website, or more traditional strategies like print ads and handing out leaflets in town, let borrowers know you can help them obtain commercial financing.

For residential brokers looking to increase their business, this is a great year to begin closing commercial mortgages. With commercial lender and borrower appetites expected to be strong, 2018 presents an opportunity to expand your products offerings and earn more.

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