Multifamily Leads Way for 2022 CMBS Deals

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“CRED iQ tracked over $85 billion in multifamily originations for year-to-date 2022, including loans that were securitized in Fannie Mae, Ginnie Mae, Freddie Mac, and CMBS conduit transactions,” wrote Marc McDevitt, a senior managing director at CRED iQ.

“As a data, analytics and valuation partner to the commercial real estate community, CRED iQ helps CRE professionals uncover financing, leasing and investment opportunities. One of our many solutions is identifying the most active markets for loan originations. The highest volume of loan originations is typically in the multifamily sector for any commercial property type on a yearly basis.

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“According to the Mortgage Bankers Association, multifamily originations were up 24 percent year over year in the second quarter and up 18 percent compared to the first quarter. 

“Loans from Fannie Mae securitizations accounted for 41 percent of new originations by aggregate balance. CRED iQ included approximately $35.5 billion in Fannie Mae loan originations through August 2022 in observations. 

“Through the first half of 2022, Fannie Mae issued approximately $34.7 billion in mortgage-backed securities, comprising nearly 1,900 loans. The Washington, D.C., and Phoenix markets have dominated Fannie Mae issuance so far in 2022 with approximately $1.7 billion in multifamily originations for each metropolitan statistical area (MSA).

“Freddie Mac securitizations accounted for 29 percent of 2022 year-to-date (YTD) multifamily originations within the subset. New multifamily originations that were securitized in CRE CLO (12 percent), Ginnie Mae (11 percent), conduit (4 percent) and single-asset single-borrower (3 percent) transactions made up the remainder.

“Loan origination activity this year has been heavily concentrated in primary markets, which accounted for approximately 56 percent of total multifamily originations through 2022 YTD. Loans secured by multifamily collateral in secondary markets made up 26 percent of new origination volume while loans secured by properties in tertiary markets made up 18 percent. Altogether, the 10 most active markets for 2022 multifamily originations accounted for 37 percent of total volume.

“In total, the New York-Northern New Jersey MSA was the most active market with $4.7 billion in originations, accounting for 5.5 percent of aggregate loan origination volume. The Dallas-Fort Worth MSA was the second most active market with $3.9 billion in multifamily originations, accounting for 4.6 percent of the total. Phoenix (4.3 percent), Houston (4 percent) and Washington, D.C., (3.7 percent) rounded out the five most active multifamily markets for loan originations in 2022. 

“Notable secondary markets with the highest levels of origination activity included Columbus, Ohio (1.5 percent of total aggregate volume), Las Vegas (1.4 percent), Indianapolis (1.3 percent), Tampa (1.2 percent) and San Antonio (1.2 percent). Each of these secondary markets tallied over $1 billion in multifamily originations in 2022, between Fannie Mae, Ginnie Mae, Freddie Mac and private-label CMBS securitizations.

“Comparing YTD 2022 origination activity to 2021, we find some common markets as leaders in volume. For example, San Antonio led all secondary markets in origination volume during 2021 and ranks fifth through August 2022. Conversely, Oklahoma City had the second-highest volume of multifamily originations among secondary markets in 2021, but has failed to surpass the top 30 secondary markets so far in 2022.

“For those interested in building lending pipelines into tertiary markets, the Ogden, Utah, Dayton, Ohio, and Durham, N.C., markets were among the most active. CRED iQ tracked over $380 million in 2022 multifamily originations for each of these markets.”