By Globe St. Thursday, April 9, 2015

A Record $400B in CRE Loans Originated in 2014

WASHINGTON, DC—2014 was a banner year for commercial real estate financing.

Commercial and multifamily mortgage bankers closed $399.8 billion of loans during those twelve months, according to the Mortgage Bankers Association’s 2014 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation. Life insurance companies and the GSEs posted record origination volumes, while banks had the second highest level on record.

2015 promises to be equally as robust, Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, tells “There has been a lot of momentum for the first quarter. For instance, CMBS issuance year to date through March is up 30% year over year already.

Rising interest rates will likely not dampen activity, he says – if they even rise to any significant degree. It is possible a sharp uptick or even a steady increase could take the wind out of the sails of some deals, Woodwell adds, “but at the same time you have continuing improvements in property fundamentals and property values that are well above where they were in the recession.”

There is also the fact that the origination activity last year was broad-based, and not concentrated among any one type of lender, he also says.

CMBS took the lead last year, originating $106.3 billion of the total. Commercial banks originated the second highest volume, at $102.5 billion. They were followed by life insurance companies and pension funds, Fannie Mae, Freddie Mac and then REITs, mortgage REITs and investment funds.

Multifamily properties saw the highest origination volume at $150.3 billion, followed by office buildings, retail properties, hotel/motel, industrial and health care.

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