Annual commercial mortgage originations down nearly 50%

He noted that year-to-date CRE mortgage borrowing has fallen 44%, driven by the general unease over property fundamentals, uncertainty about property values, and the fluctuating interest rate environment. “Greater certainty around those conditions is a key prerequisite to breaking the logjam of transaction activity,” Woodwell added.

On the bright side, Woodwell observed quarter-over-quarter volumes were more stable, with some sectors like industrial properties and life company lenders seeing increased activity.

Looking at the quarterly changes, industrial properties (+36%), hotels (+2%), and even the heavily impacted office sector (+4%) did see some positive shifts. However, there was a 20% decrease in originations for retail properties and a 16% decrease for multifamily properties.

For investor types over the same period, life insurance companies bucked the trend with an 18% increase in loan volume, while other sectors saw decreases: CMBS originations (-21%), depositories (-19%), investor-driven lenders (-13%), and GSEs loans (-4%).