MBA CREF 2022 Forecasts a $1T Finance Market in 2022

SAN DIEGO—Total commercial and multifamily mortgage borrowing and lending is expected to break $1 trillion for the first time in 2022, a 13% increase from 2021′s estimated volume of $900 billion. So said a new forecast released by the Mortgage Bankers Association at its 2022 Commercial/Multifamily Finance Convention and Expo. 

During an afternoon general session, Michael Fratantoni, chief economist and SVP of research and industry technology at the Mortgage Bankers Association encouraged the audience that, with that in mind, they should “Be nimble.”

He also said that “What looks like uncertainty today, won’t be what it looks like tomorrow,” and encouraged the audience to stay on their toes.

According to panelist Jamie Woodwell, MBA VP for CRE research, 2021 was a remarkable year for CRE markets and he expects 2022 to continue that momentum. 

“Commercial real estate lending volumes are closely tied to the values of the underlying properties,” Woodwell said. “In 2021 those values rose by more than 20%, and those increases will fuel further demand for mortgage debt in the coming years.”

He explained that continued increases in property incomes, and stability in the ways investors value those incomes, should also support that solid demand for mortgage capital, “even in the face of modest increases in interest rates.”

He continued that multifamily lending alone is forecast to rise to $493 billion in 2022. That new record is approximately a 5% increase that surpasses last year’s record total of $470 billion. MBA also anticipates borrowing and lending to remain high in 2023, with slightly more than $1 trillion of total commercial real estate lending and $474 billion in multifamily lending.   

Switching gears, the MBA survey, also said that on the origination front, preliminary 2012 originations are 67% higher than 2020. A preliminary measure of commercial and multifamily mortgage bankers’ originations volumes shows activity in 2021 was 67% higher than in 2020. By property type, originations for industrial properties increased 140% from 2020, retail properties increased 73%, hotel properties increased 71%, office properties increased 66%, health care properties increased 56%, and multifamily property originations increased 54%, the survey said.

Among investor types from 2021 compared to 2020, loans for investor-driven lenders increased 225%, originations for CMBS increased 167%, loans for commercial bank portfolios increased 83%, and loans for life insurance companies increased 76 percent. GSE loans decreased 17%, the survey said.

When talking about commercial and multifamily mortgage maturity volumes, Woodwell said they are expected to increase 12% in 2022. $248.8 billion of the $2.6 trillion (10 percent) of outstanding commercial and multifamily mortgages held by non-bank lenders and investors will mature in 2022.

“A large share of the balance of loans maturing this year and in 2023 are either shorter-term loans included in single-asset single-borrower commercial mortgage-backed securities, or are those made by investor-driven lenders,” Woodwell said. “Part of that concentration stems from the growth of those sectors in recent years. Another factor is that many of the longer-term loans held by life companies or Fannie Mae or Freddie Mac that would have been due have already been refinanced or were part of a property sale.”

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