Besides being an important networking event with some of the biggest names in commercial real estate, MBA’s Commercial Real Estate Finance conference highlights pertinent information about what’s taking place in the real estate industry –- and this year was no exception.
Below we outline some of the major predictions about the fundamentals of the commercial real estate industry presented by the MBA’s research team at the conference:
2) Commercial/Multifamily Mortgage Originations: The amount of mortgage originations put forth by commercial banks, Fannie Mae and Freddie Mac, CMBS shops, and life-insurance companies shot up at the end of last year. Originations increased 11 percent year over year and 27 percent quarter over quarter. For 2015, the MBA predicts a seven percent rise in originations, hitting $414 billion, and $430 billion in 2016.
3) Commercial Mortgage Maturities: Eight percent, or $121 billion of the $1.5 trillion outstanding in total commercial mortgages will be due this year. That is a 31 percent increase from 2014. It almost doubles next year, when the number hits $223 billion. The Mortgage Bankers Association research team believes that many of these loans are already in the process of refinancing.
4) Multifamily Construction Uptick: Analysts predict that multifamily construction will continue to steadily increase over the next few years. There were 353,000 housing starts in 2014, with 380,000 forecast for this year and 385,000 for 2016. Vacancy in this sector currently stands at 7.7 percent, the lowest since 1984, when it was at 7.5 percent.
In general, spirits were high and outlooks optimistic coming out of the conference as the industry moves into 2015. How do you think CRE will fare in 2015? Do you agree with the MBA?