Commercial loan originations shifted into high gear in the second quarter of 2025. At the same time, multifamily loan originations decreased for the quarter and for the year, according to a quarterly survey by the Mortgage Bankers Association (MBA).
The association reports that a jump in loans for office, health care and industrial properties resulted in commercial mortgage loan originations increasing 66% compared to the second quarter a year ago. Originations also increased 48% quarter over quarter. After reaching an annual volume of $816 billion in 2022, commercial and multifamily borrowing fell almost in half in 2023 to $429 billion, according to the MBA. Last year, originations started a slow recovery, reaching $498 billion. This year, that recovery appears to be continuing.
The moribund office sector perked up in the first quarter of the year, with a 205% year-over-year increase in the dollar volume for loans. That pace cooled in the second quarter as originations decreased 18%, but office originations still saw a 140% year-over-year increase in the dollar volume.
On a quarterly basis, the MBA found that originations for industrial properties jumped by 102% between this year’s first and second quarters. Year over year, industrial originations were up 53%. There was a 90% increase in quarterly originations for health care properties and a 77% increase in health care properties year over year. Retail originations increased 58% over first-quarter figures, and 30% year over year.
Originations for multifamily properties were down sharply this year, falling 41% between the first and second quarters and decreasing 35% from a year ago. Originations for hotel properties were unchanged compared to the first quarter but fell 30% from the second quarter in 2024.
The dollar volume of loans originated for depositories increased by 108% year over year. Loan volume for investor-driven lenders increased 93%, while loans for life insurance companies increased 72%. Government-sponsored enterprises, such as Fannie Mae and Freddie Mac, saw a 59% increase in loans.
“Commercial and multifamily borrowing gained significant momentum in the second quarter of 2025, with strong increases across most property types and capital sources,” said Reggie Booker, MBA’s associate vice president of commercial research. “While multifamily and hotel lending remain below last year’s levels, much of the strong annual growth reflects the exceptionally low levels of activity reported last year. Lending by depositories more than doubled, and originations by investor-driven lenders surged by over 90 percent, highlighting renewed interest from both traditional institutions and private capital.”
