In 2022, commercial real estate (CRE) mortgage originations totaled $816 billion according to the Mortgage Bankers Association’s (MBA) Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation. This marks the second-highest level on record, following 2021’s record-breaking $891 billion in originations. Excluding activity from smaller and mid-sized depositories not directly captured in MBA’s survey, CRE mortgage bankers closed $595 billion of loans – a 13% decline compared to 2021’s reported figure of $683.2 billion.
Jamie Woodwell, MBA’s Head Of Commercial Real Estate Research commented that borrowing and lending began strongly at the start of last year but dropped off due to rising interest rates, uncertainty about property values and increased questions about economic conditions as well as some property fundamentals. He added that bank lending actually rose by 12%, year over year while multifamily properties generated the highest volume with a total dollar volume closed by mortgage bankers amounting to 93%.
The survey also revealed that depositories were leading capital sources for CRE financing with their contribution totaling up at 408$billion for total commercial & multifamily lending along with 189$billion from mortgage banker originations; followed by government sponsored entities (GSE), life insurance companies & pension funds , private label CMBS & investor driven alternative lenders . Woodwell concluded his statement saying “A key question for 2023 is when will market stabilize enough for new deal activity break through?”
