Both lenders and borrowers shifted into much higher gear in 2Q 2025 compared to 2Q 2024, willing to lend and invest in a wide range of commercial and multifamily assets. Loan originations soared 66% annually and 48% above 1Q 2025 levels.
These are the findings of the Mortgage Bankers Association’s (MBA) quarterly survey of commercial and multifamily banks. It noted, however, that the increase was partly due to the low base from which it started.
“Much of the strong annual growth reflects the exceptionally low levels of activity reported last year. Lending by depositories more than doubled, and originations by investor-driven lenders surged by over 90 percent, highlighting renewed interest from both traditional institutions and private capital,” commented Reggie Booker, associate vice president of commercial research.
Increased originations for office, health care and industrial properties contributed to a sharp rise in second-quarter loan dollar values year-over-year. Office loans were up 140%, health care properties up 77%, industrial rose 53% and retail gained 30% compared to 2Q 2024.
Two sectors did not share in the uptick. Multifamily loans fell 35% and hotels 30% compared to the previous year.
Interest from investors was widespread. The dollar value of loans from depositories spiked 108% year-over-year. Among investor-driven lenders, this gained 93%, from life insurance companies 72% and from the GSEs Fannie Mae and Freddie Mac, 59%. However, commercial mortgage-backed securities (CMBS) loans dropped 10%.
On a quarterly basis, the results were a little different. Originations for industrial, health care and retail properties all increased compared to 1Q 2025. Hotel property loans remained unchanged from the first quarter. However, office loans – which rose significantly year-over-year – fell 18% between the first and second quarter and multifamily ones slipped 41%.
There was also a shift in the volume of loans from different types of investors in the quarter. Investor-driven loans shot up 107%, followed by a 71% rise from life insurance companies, GSE loans went up by 54% and depositories surged 36%. The dollar volume of CMBS loans dropped 20%.
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