Commercial real estate loan production took a sharp turn lower during the first-three months of this year — though the decline was seasonal.
An estimated $101.7 billion in U.S. commercial mortgage originations were generated during the three months that ended on March 31, 2016.
CRE lending volume tumbled from the final quarter of last year, when commercial mortgage production amounted to an estimated $163.7 billion.
The estimates were based on an analysis of data included in
the Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations | Q1 2016 reported by the Mortgage Bankers Association and previously published data for 2015 from MBA.
There was no change in commercial mortgage production, however, compared to the same three-month period in 2015.
CRE lending at Fannie Mae and Freddie Mac had the biggest quarter-over-quarter decline: 45 percent. Lending in this category was down 22 percent on a year-over-year basis.
Next up were CRE originations for commercial banks, which sank 39 percent from the final quarter of 2015. But bank lending jumped 44 percent from the first quarter of 2015 — the best year-over-year performance.
A nearly one-third decline from the last-three months of last year was recorded for CRE loans originated for life insurance companies, though the category was off just a percent from a year earlier.
Volume for CRE loans originated for commercial mortgage-backed securities and conduits tumbled 29 percent from the fourth-quarter 2015 and was down 19 percent from the first-quarter 2015.
By property type, CRE originations secured by health care properties fell 62 percent from the fourth quarter — more than any other category. Health care production was down 57 percent from the same period last year — the worst year-over-year decline.
Industrial property loan production fell 57 percent from three months earlier and 56 percent from a year earlier.
Hotel loan originations were also down 57 percent from the prior quarter but up 3 percent from the first-quarter 2015.
A 46 percent decline from the final quarter of last year was recorded for retail property loans. But retail production soared 44 percent on a year-over-year basis — the biggest increase from a year prior.
Multifamily lending saw a 39 percent decline in the first-quarter 2016 from the previous quarter but was up 2 percent from the first-quarter 2015.
With a 23 percent quarter-over-quarter drop, office property loans had the smallest decline. Office loan production increased, however, 18 percent from the same three-month period last year.
