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Total commercial real estate mortgage borrowing and lending resulted in $816 billion in transactions last year, according to the Mortgage Bankers Association’s (MBA) 2022 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation. This represented an 8% drop from the record $891 billion in 2021, although it was also a 33% spike increase from $614 billion in 2020.

MBA noted that if activity from smaller and mid-sized depositories not directly captured in its survey was removed from the equation, commercial and multifamily mortgage bankers closed $595 billion of loans in 2022, down 13% than the $683.2 billion reported in 2021.

Multifamily properties generated highest volume last year with $437 billion of total lending and $333 billion of mortgage bankers’ originations. First liens accounted for 93% of the mortgage bankers’ dollar volume closed, while depositories were the leading capital source with $408 billion of total commercial/multifamily lending. The government-sponsored enterprises (Fannie Mae and Freddie Mac) generated the second highest total volume at $128 billion, followed by life insurance company and pension funds, private label CMBS, and investor-driven lenders.

“Borrowing and lending backed by commercial and multifamily properties started 2022 strong but then dropped off because of rising interest rates, uncertainty about property values, and increased questions about the economy and some property fundamentals,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Despite the eight percent annual decline, the $816 billion in total volume was still the second highest on record. Bank lending ran against the trend, increasing by 12% to $409 billion. A key question for 2023 is when the market will have stabilized enough for the logjam in new deal activity to break.”