According to the Mortgage Bankers Association (MBA), commercial and multifamily mortgage loan originations experienced a significant increase in the third quarter of 2024, rising by 59% compared to the same period last year. This also marks a 44% increase from Q2 of this year. The only property type that saw a decrease was office loans, which decreased by 3%. On the other hand, healthcare loans rose by an impressive 510%, while hotel loans increased by 99%, retail loans rose by82%, industrial properties saw an increase of57%, and multifamily properties increasedby56%.
MBA’s head of commercial real estate research, Jamie Woodwell stated that after a slow start earlier in the year, borrowing and lending for commercial real estate properties picked up during Q3. He attributed this growth to lower interest rates as well as dropping yields on ten-year Treasury bonds from an average rateof4.31%in June to3.72%in September.
However,Woodwell noted that long-term rates have since risen again which could potentially slow down last quarter’s momentum.He emphasized that each property and loan is unique with different factors such as market conditions,vintage,and business plans influencing their borrowing/lending volume in future quarters.
Overall,the post highlights how CRE lending has seen significant growth recently due to favorable market conditions,but it also acknowledges potential challenges ahead based on changing interest ratesand individual property circumstances.
