Q1 Commercial and Multifamily Mortgage Originations Remain Muted

During the first quarter, there was a 31% year-over-year decline in the dollar volume of loans for retail properties, a 22% decrease for healthcare properties, a 21% drop for office properties, and a 7% dip for multifamily properties. The only sectors that recorded surging origination was lodging with an 8% increase and industrial properties with a 63% spike.

Among investor types, the dollar volume of loans originated for depositories decreased by 41% year-over-year, while government-sponsored enterprises loans decreased by 17%. On the flip side, there was a 35% increase in life insurance company loans, a 41% increase for investor-driven lender loans, and a 93% increase in the dollar volume of commercial mortgage-backed securities loans.

Jamie Woodwell, MBA’s head of commercial real estate research, observed, “Elevated interest rates and uncertainty about their direction have kept many current owners on the fence, with little commending a sale or refinance unless something forces the issue. With loan maturities and other triggers increasingly likely to prompt action, property owners, potential owners, lenders, and others are all working through the specifics of each individual property to identify the level of mortgage debt that property can support. New loan originations should follow as this continues.”