The volume of multifamily and commercial loan originations jumped 72% in the first quarter of 2022 year over year. Lenders reported solid increases in all categories, but hotels led the wave with a 359% increase, per the Mortgage Bankers Association. This is no surprise as during the pandemic travel and boarding was severely impacted. Multifamily increased 57% and industrial rose 145%. Jamie Woodwell, Mortgage Bankers Association VP of Commercial Real Estate Research had some comments on the matter. “The strong momentum of commercial lending at the end of 2021 carried into the first quarter. The continued growth in lending activity is the result of the ongoing strong demand for certain property types like industrial and multifamily, as well as renewed interest in other property types that saw more dramatic declines during the early stages of the pandemic, such as hotel and retail,” Jamie commented. Lastly, Jamie stated, “It is likely that rising rates will take the wind out of the sails of borrowing in upcoming quarters, but strong market fundamentals, property values and investor interest should continue to support the market.”
With no surprise, office space originations declined 48%. This is due to the rise in work from home positions as well as large companies, like Ernst & Young, going completely remote indefinitely. Activity spiked for most investor types with the dollar amount of loans for depositories gaining the most at 194% year-over-year. Life insurance company portfolios rose 81%, lending company portfolios rose 77% and commercial mortgage-backed securities rose 56%. However, Fannie and Freddie investments only rose 1%!