Commercial Real Estate News
Commercial Property Lending Rebounds 52 Percent in U.S.
Banks Drive Refinancing Wave in 2026, Says MBA
Commercial and multifamily mortgage lending surged in early 2026, with originations rising sharply from a year earlier as banks stepped back into the market to refinance maturing debt, according to new data from the Mortgage Bankers Association.
Total originations increased 52% in the first quarter of 2026 compared with the same period in 2025, marking a broad recovery in transaction activity across major property types. However, lending volumes fell 30% from the fourth quarter of 2025, a pullback the association attributed largely to normal seasonal patterns rather than a deterioration in credit conditions.
"Commercial and multifamily originations increased 52 percent on an annual basis in the first quarter of 2026, reflecting a meaningful rebound in lending activity," said Reggie Booker, associate vice president of commercial research at the MBA. He pointed to an 80% jump in depository lending, driven by a wave of bank-held loans reaching maturity and needing refinancing. "While overall activity declined from the fourth quarter of 2025, that slowdown is consistent with typical first-quarter seasonality," he added.
The annual gains were led by sharp increases in lending tied to healthcare, retail, hotel, industrial, and multifamily assets. Healthcare property lending posted the strongest growth, surging 209% from a year earlier, followed by retail at 148%, hotels at 85%, industrial at 56%, and multifamily at 49%. Office lending was the only major segment to decline year over year, slipping 2%.
Investor composition also shifted notably. Lending to investor-driven lenders more than doubled, rising 133% year over year. Depository institutions increased lending by 80%, while government-sponsored enterprises including Fannie Mae and Freddie Mac grew 38%. Life insurance company lending rose 9%, while commercial mortgage-backed securities (CMBS) issuance fell 14%, underscoring continued caution in securitized markets.
Despite the year-over-year strength, quarterly comparisons showed broad cooling from the end of 2025. Multifamily originations fell 28% from the fourth quarter, mirroring declines of 28% in office and industrial lending and a 5% drop in retail. Hotel lending was a relative outlier, rising 3%, while healthcare originations jumped 70%, reflecting uneven momentum across property sectors.
By lender type, the quarterly slowdown was widespread. Depository lending dropped 37%, life insurance lending fell 36%, GSE activity declined 35%, CMBS originations were down 23%, and investor-driven lenders saw an 18% reduction.
Taken together, the data points to a market in transition: a strong year-over-year rebound driven by refinancing demand and selective sector strength, offset by a typical seasonal slowdown and lingering caution in securitized and institutional capital channels.
