Commercial and Multifamily Borrowing Down 25% Year-Over-Year in 2023Q4

On Tuesday, the Mortgage Bankers Association (MBA) released its Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. According to the survey, commercial and multifamily mortgage loan originations were 25% lower in 2023Q4 when compared to 2022Q4. However, when compared to 2023Q3, they were 13% higher.

On a quarterly basis, Q4 originations for hotel properties increased 131% compared to 2023Q3. The MBA reports that there was a 91% increase in originations for retail properties, a 72% increase for health care properties, and a 13% increase for multifamily properties. Originations for industrial properties declined 11%, and originations for office properties dropped 32%.

Among investor types, between Q3 and Q4, the total volume of loans for CMBS increased 68%, loans for investor-driven lenders increased 35%, originations for depositories increased 17%, and loans for CSE’s increased just 1%. The dollar volume of loans for life insurance companies fell by 7%.

Commenting on the results of the survey, MBA Head of Commercial Real Estate Research Jamie Woodwell said,

“Borrowing and lending backed by commercial real estate remained subdued to close out 2023. The fourth quarter saw a small pick-up from the previous quarter, as is usually the case, but was still down about 25% from 2022’s already suppressed fourth-quarter pace. For the year, mortgage originations were about 50% below 2022 levels, with every major property type and capital source experiencing a decline.”