Commercial/Multifamily Borrowing Down in Q3

The Mortgage Bankers Association (MBA) released on Tuesday (11-7-23) its Quarterly Survey of Commercial/Multifamily Originations for Q3. According to the report, commercial and multifamily originations were down 49% year-over-year and 7% when compared to Q2.

Decreases in originations for all major property types led to the overall drop in commercial/multifamily lending volumes when compared to 2022Q3, the MBA said. There was a 76% year-over-year decline in the dollar volume of loans for health care properties, a 52% decrease for hotel properties, a 51% drop for retail properties, a 50% decline for multifamily properties, a 49% decrease for office loans, and a 35% decline for industrial properties.

Adding additional background and his analysis to the report, Jamie Woodwell, MBA’s Head of Commercial Real Estate Research, said:

“Borrowing backed by commercial real estate properties declined again in the third quarter. Borrowing and lending were down for every property type and capital source from one year ago. However, compared to this year’s second quarter, volumes were more stable, and some sectors—including industrial properties and life company lenders—showed an uptick in volume.

Year-to-date, CRE mortgage borrowing has fallen 44%, driven by questions about some properties’ fundamentals, uncertainty about property values, and higher and volatile interest rates. Greater certainty around those conditions is a key prerequisite to breaking the logjam of transaction activity.”