According to the Mortgage Bankers Association, commercial and multifamily real estate mortgage loan originations were down 53% compared to the previous year. However, there was a 23% increase from the first quarter. The Tampa Area commercial real estate market has generally held up better than the nation, but it has not been immune to the downturn in certain submarkets and asset classes. Owner-occupied sales remain firm with investor transactions accounting for the majority of the drop off.
MBA’s head of commercial real estate research, Jamie Woodwell, highlighted that high interest rates, uncertainty surrounding property values, and concerns about property fundamentals have all contributed to the slowdown. Woodwell expects the logjam to gradually break in the upcoming quarters, but the future course will depend on factors such as interest rates and overall economic conditions.
Specifically, various types of properties in the greater Tampa Bay area experienced declines in dollar volume of loans, and asset class specific volumes decreases are tracking the nationwide trends. Healthcare loans nationwide saw a significant 74% decrease, while retail and industrial loans both fell by 55%. Multifamily loans dropped by 48%, and hotel loans slipped by 32%, according to MBA.
This decline in commercial real estate lending aligns with the warnings experts have been issuing about the office sector. The persisting work-from-home trends have been negatively impacting demand for office, in particular. In fact, office vacancies in the US recently reached a record-high of 13. The core centers in the Tampa area, however, remain strong (Downtown Tampa and St Petersburg, Westshore, Carillon, etc). It is the smaller submarkets, such as the suburbs that have seeing considerable diminishment in demand and high vacancies.
MBA Reports Considerable Decline in Commercial Real Estate Loans
According to the Mortgage Bankers Association, commercial and multifamily real estate mortgage loan originations were down 53% compared to the previous year. However, there was a 23% increase from the first quarter. The Tampa Area commercial real estate market has generally held up better than the nation, but it has not been immune to the downturn in certain submarkets and asset classes. Owner-occupied sales remain firm with investor transactions accounting for the majority of the drop off.
MBA’s head of commercial real estate research, Jamie Woodwell, highlighted that high interest rates, uncertainty surrounding property values, and concerns about property fundamentals have all contributed to the slowdown. Woodwell expects the logjam to gradually break in the upcoming quarters, but the future course will depend on factors such as interest rates and overall economic conditions.
Specifically, various types of properties in the greater Tampa Bay area experienced declines in dollar volume of loans, and asset class specific volumes decreases are tracking the nationwide trends. Healthcare loans nationwide saw a significant 74% decrease, while retail and industrial loans both fell by 55%. Multifamily loans dropped by 48%, and hotel loans slipped by 32%, according to MBA.
This decline in commercial real estate lending aligns with the warnings experts have been issuing about the office sector. The persisting work-from-home trends have been negatively impacting demand for office, in particular. In fact, office vacancies in the US recently reached a record-high of 13. The core centers in the Tampa area, however, remain strong (Downtown Tampa and St Petersburg, Westshore, Carillon, etc). It is the smaller submarkets, such as the suburbs that have seeing considerable diminishment in demand and high vacancies.