In the latter part of 2022, traditional lenders pulled back from commercial real estate (CRE) lending. Despite this, the Mortgage Bankers Association’s (MBA) 2022 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation reported that CRE mortgage originations totaled $816 billion for the year – representing a second-highest level on record after 2021’s record-breaking $891 billion in originations.
Excluding activity from smaller and mid-sized depositories not directly captured in MBA’s survey, mortgage bankers closed $595 billion of loans in 2022 – a 13% decline compared to 2021’s reported figure of $683.2 billion. Jamie Woodwell, MBA’s Head Of Commercial Real Estate Research commented that borrowing and lending started off strong at the beginning of 2020 but declined due to rising interest rates as well as uncertainty about property values and economic conditions affecting some property fundamentals. Interestingly enough bank lending increased by 12%, year over year according to Woodwell’s press release detailing survey results .
Multi family properties generated highest volume with total dollar volume closing at 437 billions out which 333 billions were closed by mortgage bankers alone while first liens made up 93% share out it .
Depositories ended up being leading capital source accounting for 408 billions total commercial multifamily loan amount along with 189 billons originated through mortgage banker activities , followed by government sponsored entities(GSE ) generating 128 billons , life insurance companies pension funds private label CMBS & investor driven alternative lenders respectively .
Woodwell acknowledged uncertainty will continue into 2023 saying “A key question for 2023 is when market will have stabilized enough so logjam new deal activity can break.”
