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Banks’ CRE Loan Originations Drop Sharply in Q3
Commercial mortgage origination volumes declined sharply among bank-held commercial real estate loans in the third quarter of 2023, Trepp said late last month. Net charge-offs, delinquency and occupancy rates reflect increased stress in CRE lending.
Overall, new CRE loan originations fell $2.2 billion across all property sectors to $2.5 billion in Q3 2023 from $4.7 billion in Q2, according to Trepp, with multifamily and lodging experiencing the largest quarter-over-quarter decreases in origination volume. “Furthermore, the mortgage underwriting terms for any new originations in the third quarter show greater weakness relative to originations made in prior quarters,” said Emily Yue, research analyst at Trepp.
Although the lodging and retail sectors have seen some positive signs in the past few quarters regarding delinquencies, the office sector rates continue to rise. The overall delinquency rate experienced a sharp rise, surging from 1.2% in the previous quarter to 1.5% as Q3 ended.
- ◦Financing
