Q2 Commercial, Multifamily Loans Way Down

Even as the housing market fought through the coronavirus pandemic, commercial and multifamily mortgage loan originations dropped 48 percent in the second quarter compared to a year ago, according to a survey released Monday by the Mortgage Bankers Association.

MBA’s quarterly survey of commercial/multifamily mortgage bankers originations found they had declined 31 percent from the first quarter.

“Commercial real estate borrowing and lending slowed dramatically in the second quarter, as uncertainty around the COVID-19 pandemic caused both borrowers and lenders to focus more of their attention on their existing books of business instead of new opportunities,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. 

All property types showed a decline in the second quarter in commercial/multifamily lending volumes when compared to the second quarter of 2019. This includes:

  • A 91 percent year-over-year decrease in the dollar volume of loans for hotel properties.
  • A 74 percent decrease for retail properties.
  • A 71 percent decrease for office properties.
  • A 44 percent decline for industrial properties.
  • A 40 percent decrease in health care properties.
  • A 24 percent decrease for multifamily property loan originations. 

“The originations picture shows a marked divide between properties that were the most dramatically and immediately hit by the pandemic – lodging and retail – and those that have fared better – multifamily and industrial. Refinancing in government-backed loans has shown the greatest resilience.”