Commercial and multifamily lending reaches an all-time high

Just last week, a report published by the Mortgage Bankers Association (MBA) captured how commercial lending in 2018 was projected to outpace previous years. The study’s authors also noted that they’re expecting multifamily and commercial origination loans to reach $532 billion this year, at least $2 billion more than last year.

One of the study’s lead researchers notes that these forecasted statistics are based on the multifamily and commercial mortgage markets experiencing exponential growth during the past year. He notes that there have been increases in the number of new originations and that the amount that has been borrowed and lent has also steadily gone up. He notes that this trend is expected to continue.

The MBA researcher also noted that the outstanding commercial loan debt amount is currently at $2.2 trillion, an amount that he says has also set a record. He notes that this, coupled with low delinquency amounts, sends a clear message that existing loans are performing well.

He notes that retail loans, as an asset, haven’t been performing as well as industrial and multifamily properties have during the past year. The former has seen far less asset appreciation and income growth than the latter.

What the retail market does have going for it, though, are property fundamentals. They’re currently stable. Much like industrial and multifamily properties, there have been very few declines in net operating income (NOI) within the retail sector.

The commercial lending market is expected to remain strong as prices continue to rise, although perhaps a little more slowly than they have in recent years. He notes that the continued availability of capital and robust debt leads him and his colleagues to conclude that this will be the case.

By the end of the year, the MBA forecasts that multifamily lending will have increased by at least 7 percent to $251 billion. It’s expected to increase another 2 percent in 2019.

If you’re considering purchasing commercial real estate, then it sounds like the market is ripe to do so. There are several benefits to using a closing attorney instead of a title company to close on your property. They center around liability, licensing and legal knowledge. A Melbourne commercial property closing attorney can advocate for your interests from negotiating a purchase contract to wrapping up a deal.


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