Despite a slight bump in overall quarterly commercial real estate lending, the volume of securitization conduit fundings turned sharply lower.
Compared to the first quarter of this year, commercial mortgage originations during the period from April 1 through June 30 jumped 17 percent.
A more telling comparison, the one between the second quarter of last year and the second quarter of this year, had CRE production up 1 percent.
Those details were outlined in
the Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations | Q2 2016 from the Mortgage Bankers Association.
“Borrowing and lending backed by commercial and multifamily properties remained strong during the second quarter,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in an accompanying statement. “Low interest rates combined with strong commercial property market fundamentals to further support lending and to keep overall borrowing levels on pace with last year’s strong level.”
A Mortgage Daily analysis of the survey data along with previously published production data for 2015 from MBA indicates that second-quarter 2016 CRE loan originations were roughly $118 billion.
Estimated CRE lending jumped from $102 billion three months earlier and was also up from $117 billion one year earlier.
Among CRE lender types, a one-third increase was recorded from the year-previous period for commercial banks — the biggest year-over-year gain of any lender type.
Life insurance companies improved originations by 15 percent from the second-quarter 2015.
At Fannie Mae and Freddie Mac, multifamily lending was off by 3 percent.
The worst performance versus a year earlier was with commercial mortgage-backed securities conduit lenders, where volume sank 40 percent.
By property type, second-quarter 2016 office building financing increased 11 percent from 12 months earlier, the most of any category.
A 9 percent year-over-year gain in production was recorded for industrial property loan production.
Multifamily lending slipped 1 percent from a year earlier, while retail property loan production fell 9 percent, and hotel loan originations declined 11 percent.
A 64 percent plunge in health care property loans closed was the biggest drop of any category versus the second-quarter 2015.
