MBA Reports Commercial/Multifamily Borrowing Jumped 72 Percent During Q1

May 12, 2022

Commercial and multifamily mortgage loan originations increased 72 percent during the first quarter of 2022 compared to the same period last year, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. In line with seasonality trends, originations during the first three months of 2022 year were 39 percent lower than the fourth quarter of 2021.

“The strong momentum in commercial and multifamily borrowing and lending at the end of 2021 carried into the first quarter,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “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.”

Compared to a year earlier, a rise in originations for hotel, industrial, and retail properties led the overall increase in commercial/multifamily lending volumes. By property type, hotels increased by 359 percent, industrial increased by 145 percent, retail increased by 88 percent, health care properties increased by 81 percent, multifamily increase by 57 percent and office increased 30 percent.

Among investor types, the dollar volume of loans originated for depositories increased by 194 percent year-over-year. Life insurance company portfolios increased 81 percent, investor-driven lenders increased 77 percent, Commercial Mortgage-Backed Securities (CMBS) increased 56 percent, and Government Sponsored Enterprises (GSEs – Fannie Mae and Freddie Mac) increased 1 percent.

As is typical in the first quarter, originations decreased in comparison to the prior year’s fourth quarter, with total activity falling 39 percent. Among property types, declines were seen in office (48 percent), multifamily (41 percent), hotel (38 percent), retail (32 percent), and industrial (29 percent). Health care properties increased 17 percent.

Among investor types, the dollar volume of loans for CMBS decreased 61 percent, loans for depositories decreased 41 percent, originations for GSEs decreased 39 percent, investor-driven lenders decreased 30 percent, and life insurance company loans decreased 23 percent.

“It’s likely that the rise in interest rates will take some 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,” Woodwell said.

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