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Chart of the week

Commercial mortgage originations reach a multiyear high

This week’s chart focuses on why the commercial mortgage market’s strong health is expected to last throughout 2019.

March 15, 2019 | 1 minute read
Commercial/Multifamily Mortgage Bankers Origination Index
  • The Commercial/Multifamily Mortgage Bankers Origination Index jumped more than 30% in Q4 from the prior quarter and reached its highest level in more than a decade.1 The index was led by strong origination activity in the healthcare, multifamily and industrial sectors.1
  • Looking ahead, the Mortgage Bankers Association projects that the healthy origination activity of 2018 should continue into this year, with commercial and multifamily mortgage originations set to match their 2017 record high of $530 billion.1
  • Institutional investor interest in real estate remains high. According to the 2019 Preqin Global Real Estate Report, 2018’s capital raise of $26 billion into real estate debt strategies marked the fifth time in the past six years in which capital raised for these strategies exceeded $20 billion.2
  • Early in 2019, YTD flows into real estate mutual funds and exchange-traded funds (ETFs) have topped $400 million, reversing last year’s significant outflow.3
  • Against the backdrop of the Fed’s notably dovish shift this year and with global bond yields continuing to trade near historic lows, it appears that many investors are turning to commercial real estate as a source of income and diversification in a portfolio.

The chart of the week and any accompanying data is for informational purposes only and shall not be considered an investment recommendation or promotion of FS Investments or any FS Investments fund. The chart of the week is subject to change at any time based on market or other conditions, and FS Investments and FS Investment Solutions, LLC disclaim any responsibility to update such market commentary. The chart of the week should not be relied on as investment advice, and because investment decisions for the FS Investments funds are based on numerous factors, may not be relied on as an indication of the investment intent of any FS Investments fund. None of FS Investments, its funds, FS Investment Solutions, LLC or their respective affiliates can be held responsible for any direct or incidental loss incurred as a result of any reliance on the chart of the week or other opinions expressed therein. Any discussion of past performance should not be used as an indicator of future results.

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