Commercial lending rises by double digits in 2014 over the prior year

Commercial and multifamily lenders closed on nearly $400 billion in loans in 2014, which was up by double digits over the prior year and the highest total since the booming years in the lead up to the credit crisis, the Mortgage Bankers Association (MBA) reported Wednesday.

“Last year was a strong year for commercial and multifamily mortgage borrowing and lending,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell in a news release. “The year saw record origination volumes from life insurance companies and the GSEs [government sponsored enterprises] and the second-highest level on record for banks.”

Reported volume was $399.8 billion, which was up 12 percent over the prior year. Woodwell said it was the highest origination total since 2006 and 2007. Multifamily properties had the most volume at just over $150 billion, followed by office, retail, hotel/motel, industrial and health care.

Of lenders, commercial mortgage-backed securities issuers originated the most volume at just over $106 billion, followed closely by commercial banks at $102.5 billion, then by life insurance companies and pension funds; Fannie Mae; Freddie Mac; and real estate investment trusts (REITS), mortgage REITS and investment funds.

Woodwell said that the property fundamentals in the various commercial classes continue to improve and interest rates have stayed down. As a result, the commercial and multifamily markets have started the year strong, he said.

Victor Whitman, Scotsman Guide