Commercial, multifamily originations expected to be strong throughout 2016

by Ryan Smith11 Jul 2016
Commercial and multifamily mortgage originations will be down slightly in 2016 from the highs of previous years, according to projections from the Mortgage Bankers Association.

The MBA projects commercial and multifamily origination will total $500 billion in 2016, down slightly from the $504 billion originated in 2015 and 2007’s record high of $508 billion. The MBA projected mortgage banker originations of multifamily mortgages will total $210 billion in 2016, with total multifamily lending at $273 billion for the year.

“The year has started off with more than its fair share of twists and turns,” said Jamie Woodwell, vice president of commercial real estate research for the MBA. “When all is said and done, commercial and multifamily real estate finance markets are likely to end 2016 with another strong year of borrowing and lending.

“On the demand side, strong property fundamentals and prices should continue to support an active sales market, which will drive mortgage demand,” Woodwell added. “On the supply side, solid originations for life companies, Fannie Mae, Freddie Mac and bank portfolios are expected to make-up for some - but not all - of the slowdown in the CMBS market this year.  The net result will likely be 2016 originations coming in just a shade lower than 2015 levels.  Global economic uncertainty and a range of regulations that could affect the availability of CRE financing remain wildcards.”

The MBA projects that commercial and multifamily debt outstanding will continue to grow in 2016, ending the year at $2.9 trillion. That’s a jump of more than 3% from the end of 2015.


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