Commercial and multifamily mortgage loan originations rose 72% YOY in Q1 2022, though they were down 39% from Q4 2021 due to seasonality trends, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
“The strong momentum in commercial and multifamily borrowing and lending at the end of 2021 carried into the first quarter,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.
“The continued growth in lending activity is the result of the ongoing strong demand for certain property types like industrial and multifamily, as well as renewed interest in other property types that saw more dramatic declines during the early stages of the pandemic, such as hotel and retail.”
Demand for hotel (+359%), industrial (+145%), and retail (88%) properties pushed lending volumes up. Health care property originations rose by 81%, followed by multifamily at 57% and offices at 30%.
Among investor types, the dollar volume of loans originated for depositories rose by 194% YOY. Life insurance company portfolios increased 81%, investor-driven lenders increased 77%, Commercial Mortgage-Backed Securities (CMBS) increased 56%, and GSEs rose 1%.
Originations fell 39% from Q4 2021, which the MBA says is typical for the first quarter of a year. Declines were seen in office (-48%), multifamily (-41%), hotel (-38%), retail (-32%), and industrial (-29%). Health care properties rose 17%.
“It’s likely that the rise in interest rates will take some wind out of the sails of borrowing in upcoming quarters, but strong market fundamentals, property values, and investor interest should continue to support the market,” Woodwell said.