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Multifamily Lending Brief: Q4 2015

Multifamily Lending Brief: Q4 2015

Overall, the bank lending appetite for apartments continues to grow at a rapid pace. At the end of 2015, multifamily lending activity continues to outpace other types of bank lending, yielding a rate of 1.616. Commercial & Industrial and Commercial Real Estate were positioned second (at 1.231) and third (1.208), respectively.

 

The GSE/Agency category lending continues to lead other categories by overall market share of 41.8%. The Banks ranked second with 34.3% of overall market share at the end of 2015. More significantly, the Banks grew 13.2% compared to just 1.3% from the GSE/Agency category. As with last quarter, REITs recorded the greatest year-over-year growth of 254%, though REITs own a very small share of the market (0.9%). Also, please note the release of these data from the Federal Reserve is lagged one quarter with respect to other data represented.

 

Lending activity remains aggressive between the GSEs on an annual basis. Over 2015, Freddie Mac reported $47.3 billion of new business (with year-over-year growth of 46.7%), while Fannie Mae logged $42.4 billion of new business (with year-over-year growth of 67.1%). Freddie Mac reported $13.2 billion of new business in 2015’s 4th quarter, a decline of approximately $1 billion. Further, Fannie Mae reported $10.1 billion of new business in 4th quarter, $1.6 billion less than reported during the same period in 2014.

Market share for total multifamily lending is led by JP Morgan Chase with 17.6% at the end of 2015, tightening its share 140 basis points from last quarter. This translates to $58.8 billion, just 7% of the firm’s total loan balances. New York Community Bancorp remains second in terms of overall market share (7.8%) and first for greatest exposure to multifamily (68.0%). The bank has $25.9 billion in multifamily assets on its balance sheet.

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