According to a quarterly survey compiled by the Mortgage Bankers Association (MBA), the commercial and multifamily market opened with a whimper in 2023, with the first quarter recording its lowest origination volume in nine years.

Commercial and multifamily mortgage originations were down 56% annually and 42% from fourth-quarter 2022. It was the third straight decrease on both a yearly and quarterly basis.

Every major asset class saw a decline in origination volume, with many seeing drastic year-over-year decreases. Industrial properties experienced the largest decline, down 72% from Q1 2022, followed by health care (-69%), office (-67%) and multifamily (-55%) properties. Hotels (-8%) and retail assets (-8%) saw smaller yearly declines.

“While the first quarter is typically the quietest quarter of the year, borrowing and lending backed by commercial and multifamily properties declined in the first quarter to the slowest pace since the first quarter of 2014,” said Jamie Woodwell, the MBA’s vice president of research and economics.

“Uncertainty and volatility in regard to interest rates and property values, and supply-and-demand imbalances for some property types, has led to a logjam in commercial real estate sales and financing markets. … As loans mature and adjustable-rate loans reset, we should start to get greater insights into where things stand.”

Health care properties saw the largest quarter-over-quarter pullback in terms of dollar volume, down 65% compared to the final three months of 2022. Office (-61%), multifamily (-44%) and industrial (-36%) also had large quarterly backtracks, while retail (up 12%) and hotels (up 5%) were up from Q4 2022.