After years of avoiding commercial real estate, lenders are back and ready to finance commercial projects, according to the Mortgage Bankers Association.

The MBA found that commercial and multifamily mortgage loan originations were up 52% in the first quarter of 2026 compared to the same period in 2025.

While the total loan figures for the first quarter were 30% below the blockbuster fourth quarter of 2025, Reggie Booker, the MBA’s associate vice president of commercial research, said the decline is “consistent with typical first-quarter seasonality” and shouldn’t detract from the broader improvement in market conditions.

Commercial real estate borrowing last year totaled $706 billion, a 40% increase from 2024 and a 65% increase from 2023. Multifamily properties saw the highest volume last year, with an estimated $413 billion in total lending.  

In the first quarter of 2026, year-over-year dollar volume increases were seen virtually across the board. There was a dollar-volume increase in healthcare properties of 209% and retail properties saw dollar volumes jump 148%. There was also an 85% increase for hotel properties, a 56% jump for industrial properties and a 49% rise for multifamily properties.

In a press release from May, Booker highlighted an 80% rise in depository lending during the quarter, which he said was “driven in part by the large volume of bank-held loans maturing this year and the need to refinance those positions.”

The Wall Street Journal reports that big banks are being lured back into commercial real estate in part due to the growth in construction of large data centers. Since the pandemic-fueled crisis in office vacancies, many banks have faced major losses due to office towers becoming money-losing investments. But some analysts say attitudes are shifting and banks are on the prowl for commercial assets that can earn a return.

The Journal writes that Bank of America and U.S. Bancorp saw their commercial real estate loan balances rise more than 8% year over year in the second quarter of 2026. Truist Financial saw commercial loans increase by about 25%, and PNC Financial Services Group’s commercial loan balances rose 15%.  

Following the pandemic shutdown of 2020 and commercial real estate’s slow recovery, many observers expected the sector to be hit by a flood of defaults in CRE loans. The impact turned out less catastrophic than originally expected due to banks setting aside money to cover potential losses, negotiating new refinancing terms and getting rid of the most problematic loans.

Today, overall commercial delinquencies remain high, but many banks are seeing declines in the number of loans in distress. As the commercial real estate sector improves, banks have more money to invest in new projects.

“The strength in multifamily originations, combined with increased lending from depositories and a return of capital from other lender groups, reflects growing confidence across the commercial real estate finance market,” said Booker in an April press release from the MBA. “While challenges remain, particularly around refinancing and asset valuations, the significant pickup in activity underscores the market’s ability to adapt to a higher-rate environment.”