According to the Mortgage Bankers Association's 2016 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation, U.S. commercial and multifamily mortgage bankers closed $490.6 billion of loans in 2016.
"Last year was a strong year for commercial real estate finance," said Jamie Woodwell, MBA's Vice President for Commercial Real Estate Research. "For originations, 2016 was the third highest year on record, after 2007 and 2015. Borrowing and lending backed by multifamily properties made up the largest share of the market, and Fannie Mae and Freddie Mac drove much of that activity."
"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. 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," Woodwell continued.
Commercial banks were the leading investor group for whom loans were originated in 2016, responsible for $157.4 billion of the total. Government Sponsored Enterprises (GSEs - Fannie Mae and Freddie Mac) saw the second highest volume, $105.8 billion, and were followed by life insurance companies and pension funds, commercial mortgage-backed securities (CMBS) issuers and REITS, mortgage REITS and investment funds.
In terms of property types, multifamily properties saw the highest origination volume, $214.1 billion, followed by office buildings, retail properties, hotel/motel, industrial and health care. First liens accounted for 97 percent of the total dollar volume closed.
The reported dollar volume of commercial and multifamily mortgages closed in 2016 was three percent lower than the volume reported in 2015. Among repeat participants in the survey, the dollar volume of closed loans declined by one percent.