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CRE Mortgage Volume Tops $600B in 2019
Commercial and multifamily mortgage bankers closed a record $600.6 billion of loans in 2019, the third consecutive year of new highs in volume, the Mortgage Bankers Association reported recently. With the tailwinds of 2019 carrying over into the new year, how 2020 stacks up in comparison nonetheless “will depend on the duration of the pandemic and how quickly the economy bounces back,” said MBA’s Jamie Woodwell.
The spread of COVID-19 “has slowed borrower demand and challenged lenders’ ability to underwrite and fund many property loans,” said Woodwell, VP of commercial real estate research at MBA. “Base interest rates are extremely attractive, and new loans are still being quoted and closed, but credit spreads have increased and there are fewer lenders providing quotes.”
Woodwell suggested that 2019 was “likely the last of that string” of consecutive year-over-year increases. Last year’s total represented a 5% increase over 2018.
Commercial bank portfolios were the leading capital source for originated loans in 2019, responsible for $179.8 billion of the total, MBA said in its 2019 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.
Fannie Mae and Freddie Mac had the second highest volume at $139.1 billion, followed by CMBS issuers, life insurance companies and pension funds, and REITS, mortgage REITS and investment funds.
In terms of property types, multifamily properties had the highest volume of mortgage bankers’ origination volume at $287.2 billion. They were followed by office buildings, industrial properties, retail, hotels/motels and healthcare. First liens accounted for 94% of the total dollar volume closed last year.
Pictured: MBA headquarters in Washington, DC.
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