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Commercial and Multifamily Originations Set a Record by Rising to New Levels

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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

  1. Commercial Bank portfolios led the capital source with responsibility of $174 billion loans.
  2. Then GSEs, Government Sponsored Enterprises; Freddie Mac and Fannie Mae witnessed the second highest amount of $142.3 billion.
  3. 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. 

Information by MBA, Click here to purchase the complete report.

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Multifamily Housing Market in 2019

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Checkout a summary of 2019 trends in Multifamily Housing Markets…

In Freddie Mac’s Multifamily research, they found that “performance in the multifamily market remained healthy during 2018, despite high levels of new supply entering the market. We expect this trend to continue into 2019, but with more modest growth in comparison to recent years.”

2018 ended up with solid rent growth and only modest increases in vacancy rates despite an elevated level of new supply. There are some weakness’s in individual markets and submarkets.

“New supply will remain elevated through 2019 and into 2020 but rents and vacancies will continue outperforming historical averages due to robust demand related to the rising cost of homeownership, changing demographics and consumer preferences.”

Cap rates have slightly fallen over the past couple quarters but they expect cap rates to rise in 2019 if Treasury rates increase.

“Multifamily origination volume is projected to grow to $317 billion in 2019 driven by solid market fundamentals and strong investor demand for multifamily properties.” This figure exceeds 2018’s statistic by 3.9 percent.In conclusion, “we expect 2019 to be another strong year for the multifamily industry. Homeownership affordability constraints and consumer trends will continue to drive demand, while strong rent growth will support property price growth.”

For full analysis click here.

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