For 2016, the Mortgage Bankers Association (MBA) is projecting a $511 billion growth for originations of commercial and multifamily mortgages. This would be a 3 percent increase from 2015 volumes. This projection also exceeds the previous record of $508 billion originated in 2007.
“This past year was extremely strong for commercial real estate finance,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Property incomes are rising, interest rates are low and property values are up. We expect the momentum to continue into 2016 and to support both the demand for and supply of commercial and multifamily mortgage capital. We anticipate a growing economy, coupled with only gradual increases in interest rates, will continue to support a strong commercial property market. But, there is a chance that cap rates could increase more rapidly in response to rising interest rates, impacting property sales and mortgage originations.”
Commercial/multifamily mortgage debt outstanding is expected to continue to grow in 2016, ending the year at $2.9 trillion, more than three percent higher than at the end of 2015. MBA released its forecast of the commercial/multifamily real estate finance markets yesterday at its Commercial Real Estate/Multifamily Housing Finance (CREF) Convention in Orlando.