CRE Loan Originations Drop 25% Y-O-Y in Q4

Article originally posted on HERE on February 14, 2024

Commercial and multifamily mortgage loan originations were off 25% year-over-year in the fourth quarter of 2023 compared to a year earlier, and were up 13% from Q3 2023, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. The latest survey was released at MBA’s 2024 Commercial/Multifamily Finance Convention and Expo.

Decreases in originations for office, healthcare, multifamily and industrial properties led the overall drop in commercial lending volumes. Dollar volume of loans for office properties decreased by 68% Y-O-Y, while healthcare originations declined 39%, multifamily loans dropped by 27% and industrial mortgage volume was off by 7%. Retail and hotel loan originations increased by 50% and 81%, respectively, compared to Q4 2022.

“Borrowing and lending backed by commercial real estate remained subdued to close out 2023,” said Jamie Woodwell, MBA’s head of commercial real estate research. “The fourth quarter saw a small pick-up from the previous quarter, as is usually the case, but was still down about 25% from 2022’s already suppressed fourth-quarter pace. For the year, mortgage originations were about 50% below 2022 levels, with every major property type and capital source experiencing a decline.”