Fannie Mae and Freddie Mac were big players in the multi-family sector of the commercial real estate market last year.  According to the Mortgage Bankers Association (MBA), the year just ended was the third highest on record for commercial real estate originations, and the largest share of those originations were for multifamily properties.

Jamie Woodwell, MBA's Vice President for Commercial Real Estate Research, said that commercial and multifamily bankers closed $490.6 billion in loans in 2016, making the year the third largest on record.  Multi-family originations were responsible for $214.1 billion, of the total, followed by office buildings, retail properties, hotel/motel, industrial and health care.  First liens accounted for 97 percent of the total dollar volume closed.

The 2016 volume was down 3 percent compared to originations in 2015.  Among those lenders which reported in both 2015 and 2016 the total was 1 percent lower than the previous year.

Per MBA's Commercial Real Estate/Multifamily Finance Annual Origination Volume Summary, commercial banks were responsible for the bulk of the originations, $157.4 billion in closed loans.   Fannie Mae and Freddie Mae, (the GSE's) were second with $105.8 billion in originations followed by life insurance companies, pension funds, commercial mortgage-backed securities (CMBS) issuers, and real estate investment trusts (REITS), mortgage REITS, and investment funds.

Woodwell commented that, "Last year was a strong year for commercial real estate finance. For originations, 2016 was the third highest year on record, after 2007 and 2015. Borrowing and lending backed by multifamily properties made up the largest share of the market, and Fannie Mae and Freddie Mac drove much of that activity."

"The post-election rise in interest rates has taken a bit of wind out of the sails of the transactions' market in the first quarter of 201," he continued.  "The degree to which it and other potential market changes- such as tax reform proposals, general economic growth, foreign investment, and consumer confidence- will affect borrowing and lending in 2017 is still to be seen."