The nation’s mortgage banking firms generated less in commercial real estate loan volume last year, although it was still a relatively strong year.
CRE lenders generated $490.6 billion in commercial mortgage production during all of 2016.
The total included both CRE and multifamily loans.
Activity slowed compared to the prior year, when $503.8 billion in CRE loans were originated — though 2015 was the second-biggest year on record.
Still, last year turned out to be the third-largest year on record for commercial mortgage originations. The best year was 2007, when there was $507.7 billion in production.
The Mortgage Bankers Association reported the latest metrics in its 2016 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation.
The outlook for this year is unclear.
“The post-election rise in interest rates has taken a bit of wind out of the sails of the transactions’ market in the first quarter of 2017,” MBA Vice President for Commercial Real Estate Research Jamie Woodwell stated in the report. “The degree to which it and other potential market changes — such as tax reform proposals, general economic growth, foreign investment, and consumer confidence — will affect borrowing and lending in 2017 is still to be seen.”
Commercial banks were responsible for $157.4 billion of last year’s volume — more than any other investor type. After that was the $105.8 billion in Fannie Mae and Freddie Mac loans.
The next-biggest investor groups were life insurance companies and pension funds, followed by commercial mortgage-backed securities issuers and real estate investment trusts, mortgage REITS and investment funds.
MBA reported that there were $214.1 billion in multifamily loan originations — the most of any CRE property type. After that were office buildings, retail properties, hotels/motels, industrial and health care.
First liens made up 97 percent of 2016 CRE loan production.
