Commercial and multifamily mortgage originations jumped 24% annually during the third quarter of this year, according to survey data from the Mortgage Bankers Association (MBA).
The surge was propelled by origination growth in several property sectors — most notably, health care, which enjoyed a 239% year-over-year increase in third-quarter dollar volume. Other sectors posting sizable gains included industrial properties, which saw a 42% gain, office properties (36%) and multifamily housing (16%).
“Low interest rates are supporting strong levels of commercial and multifamily borrowing and lending,” said Jamie Woodwell, MBA’s vice president for commercial real estate research. “Through the third quarter, every major capital source is lending at a pace above last year’s level. Loans backed by multifamily and industrial properties, and made for life companies and Fannie Mae and Freddie Mac, are all running at a record pace.”
The low-rate environment should keep the surge going and encourage borrowing into next year, Woodwell added.
Third-quarter 2019 originations were up 9% compared to the second quarter. Again, much of the boost came from health care properties, with the dollar volume for these transactions increasing 60% quarter over quarter. There was a 23% quarterly increase in loans for industrial properties, a 14% increase for multifamily properties and a 13% increase for retail properties.
Not all commercial real estate sectors, however, enjoyed the same healthy growth on an annual basis. According to MBA data, retail property originations receded 2% year over year (despite a 13% quarterly increase), while hotel property transactions fell by 20% annually.
