Quarterly commercial real estate lending exploded in the final quarter of 2015, and the government-sponsored enterprises led the increase.
Commercial mortgages closed during the fourth quarter of last year worked out to 35 percent more than was funded during the third quarter.
But the improvement was less spectacular compared to the final quarter of 2014,
with CRE loan originations ascending just 19 percent.
The details were reported in the
Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations | Q4 2015 from the Mortgage Bankers Association.
Fourth-quarter 2015 activity turned out to be the strongest on record since the second quarter of 2007.
Based on an analysis of MBA’s report and utilizing previously reported CRE statistics, Mortgage Daily estimates that fourth-quarter 2015 CRE loan originations totaled around $161.6 billion, soaring from $119.7 billion three months earlier and $135.7 billion one year earlier.
Full-year CRE loan production came to an estimated $497.4 billion, leaping from $399.8 billion previously reported by MBA.
Economists at the association predict that commercial mortgage production will reach $511 billion in 2016, up
3 percent from 2015.
“We anticipate a growing economy, coupled with only gradual increases in interest rates, will continue to support a strong commercial property market,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in the report. “But, there is a chance that cap rates could increase more rapidly in response to rising interest rates, impacting property sales and mortgage originations.”
Total multifamily lending is expected to account for $262 billion of this year’s CRE activity.
Fourth-quarter 2015 CRE lending at Fannie Mae and Freddie Mac skyrocketed 90 percent from
the third quarter and was up 24 percent from the fourth-quarter 2014.
Washington-based Fannie separately reported that it provided $42.3 billion in multifamily financing last year that financed 569,000 units.
Wells Fargo Multifamily Capital was the biggest originator of Fannie’s multifamily loans last year.
At commercial banks, CRE loan production during the final three months of the year climbed by half
from the third quarter and rocketed 82 percent from the final quarter of 2014.
Life insurance companies saw a 17 percent quarter-over-quarter surge and a 19 percent year-over-year increase in commercial mortgage originations.
“Banks, life insurance companies, and Fannie Mae and Freddie Mac saw their highest originations volumes on record,” Woodwell noted.
The trade group reported that CRE originations for commercial mortgage-backed securities and conduits inched up 3 percent between the third and fourth quarters of last year but fell 2 percent from a year earlier.
The trade group warned
that $183.3 billion in CRE loans held by non-bank lenders and investors will mature this year, up by more than half from 2015.
