Record Commercial/Multifamily Volume in 2017

Multifamily mortgage financing was the big winner overall in what was a record setting year for commercial and multifamily originations.  The Mortgage Bankers Association (MBA) said a record $530.1 billion in loans were closed in 2017, an 8 percent gain from 2016.

The largest share of lending, more than half of the volume closed, was for multifamily properties at $233.9 billion.  Loans for office buildings were second followed by retail, hotel/motel, industrial, and health care properties.  Ninety-six percent of the dollar volume went to first mortgage liens.

"2017 was a very strong year, driven by solid property fundamentals, rising property values, low interest rates, and a ready supply of mortgage capital all contributing to extraordinarily attractive finance markets," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "We expect another robust year in 2018, even with the slight increase in interest rates, although perhaps not quite as robust as 2017."

Commercial banks were the most active lenders in the category, with volume of $151.2 billion.  The GSEs, Freddie Mac and Fannie Mae, were second with $130.0 billion.  The remainder of lending came from, in order, issuers of commercial mortgage-backed securities, life insurance companies and pension funds, REITS, mortgage REITS, and investment funds.