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MBA Reports 47% Decline in CRE Lending Volume for 2023
Total commercial real estate mortgage borrowing and lending totaled an estimated $429 billion in 2023, down 47% from the $816 billion in 2022 and off 52% from 2021’s record $891 billion. That’s according to the Mortgage Bankers Association’s (MBA) 2023 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.
“Higher interest rates, uncertainty about property values, and questions about some properties’ fundamentals led to a steep fall-off in borrowing and lending backed by commercial real estate last year,” said Jamie Woodwell, MBA’s head of commercial real estate research. “The declines were broad-based, covering every major property type and capital source.
“The sustained growth in the amount of CRE mortgage debt outstanding signals that much of the drop in originations was driven by a decline in borrower demand stemming from slowdowns in sales transactions and refinances. If property owners had the ability to sit pat, they generally did.”
Woodwell continued, “All indications are that 2024 is off to a slow start as well. While higher interest rates are likely to continue to act as a deterrent for many property owners, more than $900 billion of maturities – and perhaps acquiescence to those higher rates – are likely to bring some additional deals to the market this year.”
Among different property types, multifamily properties saw the highest volume last year, with an estimated $264 billion of total lending and $178 billion directly tracked by dedicated mortgage bankers. First liens accounted for 96% of the mortgage bankers’ dollar volume closed.
- ◦Financing
