The report showed that the decline in overall lending volumes was led by a fall in originations for office, multifamily, and retail. By property type, office decreased by 44%, multifamily decreased by 16%, retail decreased by 6%, and industrial decreased by 4%. Meanwhile, lending backed by hotel properties jumped 24%, and health care was up by 61% in the third quarter.
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Among investor types, the dollar volume of loans originated for commercial mortgage-backed securities (CMBS) plummeted by 71% annually, life insurance company portfolios fell 42%, government-sponsored enterprises (GSEs – Fannie Mae and Freddie Mac) decreased by 15%, and investor-driven lenders dipped 8%. Originations for depositories, on the other hand, grew by 25%.
“Different capital sources have felt the slowdown in different ways – with third-quarter originations in the CMBS market down almost 75% from a year earlier, while originations by banks and other depositories were 25% higher,” Woodwell said. “A broad decline in transaction activity is likely to impact all capital sources, although perhaps not equally.”