This week, the MBA Newslink published the Urban Land Institute in Washington, D.C.,’s findings from a survey of real estate economists. Overall, the consensus is that the recession caused by the pandemic will be short-lived and we may see an above-average GDP growth in 2021-2022. Some good news! Overall, the ULI Semi-Annual Real Estate Economic […]
The UES team attended MBA CREF in San Diego this week. It’s always a great meeting, chocked full of quality education, networking with clients and making new connections. The MBA does a good job of delivering market trends, forecasts for the year ahead and information that we need to help guide our environmental consulting services.
A few things that stood out this year:
1. Most leaders agree that while we’ve heard a recession is coming, we are still in a good space in terms of growth and liquidity in the market. Lenders are making better credit choices and commercial real estate professionals are focusing on making good deals that can ride out hiccups or shifts should they arise. From listening in on one panel Monday morning, several market leaders believe we are still 18-24 months away from seeing a slow to growth and decreased liquidity. Globe St.Com has a deeper dive into this particular panel and their discussions.
2. Across the board, commercial real estate professionals are in agreement that international affairs, such as concern over the spread of the coronavirus, and the upcoming US election has the potential to impact Q4 of 2020 and the start of 2021. Speakers at MBA stated that their organizations are planning ahead for some volatility in Q4 and working to see how many deals they can close prior to November.
3. Multifamily continues to have it’s moment. And, the market is seeing a wide variety of lending players jumping in. Banks are more involved than in prior years in providing capital. CMBS is making a comeback and the ultra-wealthy are getting involved in the space through investment funds.
Stay tuned to the UES blog for a few more highlights from the last day!
UES Consulting Services, Inc is an environmental and engineering firm specializing in Phase I Environmental Site Assessments, Phase II Subsurface Investigations and Property Condition Assessments for Commercial Real Estate transactions. We frequently research and write on trends, market updates, news and other happenings affecting our clients and partners in the commercial real estate industry
In 2018 Multifamily and Commercial mortgage bankers closed a record $573.9 billion of loans, as stated by MBA’s 2018 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.
And all of these factors below combined led to an eight percent increase in recorded Multifamily Lending compared to last year.
- Growing property values
- Low interest rates
- Solid fundamentals
- Strong appetites from both lenders and borrowers
Let’s Break Down the Numbers
- Commercial Bank portfolios led the capital source with responsibility of $174 billion loans.
- Then GSEs, Government Sponsored Enterprises; Freddie Mac and Fannie Mae witnessed the second highest amount of $142.3 billion.
- Followed by Life Insurance companies and pension funds, Commercial Mortgage-Backed Securities (CMBS) issuers, investment funds, Real Estate Investment Trust (REITS), and mortgage REITS.
In terms of Property Types…
- Multifamily Properties at $266.4 billion had the highest of mortgage bankers’ origination volume.
- Followed by retail properties, industrial, health care, office buildings, and hotel/motel.
“First liens accounted for 96 percent of the total dollar volume closed. The reported dollar volume of commercial and multifamily mortgages closed last year was eight percent higher than the volume reported in 2017. Among repeat participants in the survey, the dollar volume of closed loans increased by four percent.”Jamie Woodwell Vice President, Mortgage Bankers Association
With loan originations on the rise, the need for site assessments has never been more important. UES Consulting and our team of inspectors are well-versed in the demands of commercial and multi-family transactions and how thorough, time-sensitive Phase I Environmental Site Assessments and Property Condition Assessments can help the process run smoothly and close on time. If you are looking for a company to partner with on your Commercial Real Estate transactions of any kind, turn to our in-house engineers and environmental consultants to alleviate the burden of environmental issues and mitigate risks.
- ULI Sets Forecast for a Potential 2021-2022 Rebound
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- COVID-19 Response: UES Continues Business Operations as Normal
- MBA CREF 2020 Recap
- ULI Sets Forecast for a Potential 2021-2022 Rebound November 18, 2020
- Long-Term Housing Shortages and Affordability Issues Keep Capital Flooding into Multifamily November 14, 2020
- Medical Office Buildings a Safe Haven Asset During Uncertain Times; Physician Practices Still Struggle November 10, 2020
- COVID-19 Response: UES Continues Business Operations as Normal March 17, 2020