April 12th, 2019
Multifamily properties led the list of investments in what was arecord year of of commercial and multifamily lending in 2018. Commercial and multifamily mortgage bankers closed $573.9 billion in loans during the year according to results from a Mortgage Bankers Association (MBA) survey. The total represents an 8 percent increase from the volume in 2017.
Multifamily lending accounted for $266.4 billion in lending volume. This category was followed by office buildings, retail properties, industrial, hotel/motel and health care. Ninety-six percent of the volume was in senior lien lending.
The largest source of funding at $174.0 billion was commercial bank portfolios followed by the government sponsored enterprises (GSEs). Fannie Mae and Freddie Mac were responsible for $142 billion. Remaining lenders in order were commercial mortgage-back security (CMBS) issuers, life insurance companies, pension funds, REITS, mortgage REITS, and investment funds.
James Woodwell, MBA's vice president of Commercial Real Estate Research said, "Borrowing and lending backed by commercial and multifamily properties hit another new record last year. Solid fundamentals, growing property values, low interest rates and strong appetites from both borrowers and lenders all helped drive an 8 percent increase in recorded multifamily lending from a year ago. Repeat participants in our survey increased their lending by 4 percent during 2018, with the remaining growth coming from the addition of new firms."
Added Woodwell, "Many capital sources rose to record levels of lending- including bank portfolios, life insurance companies, and the GSEs (Fannie Mae and Freddie Mac). Among property types, multifamily pulled even further ahead as the dominant lending target, growing to 46 percent of total mortgage banker lending - a series high."