Investment in commercial property is on the rise, and various market dynamicsincluding lower cap rateshave shifted greater focus to the sale and development of hotels.
The MBA hosted a Super Bowl party to kick off the event, with NFL Hall of Fame running back Eric Dickerson addressing and mingling with the crowd Sunday afternoon. The celebrity presence, the historic game, and more than 3,000 mortgage professionals eager to share intelligence got things off to a motivating start. Here are some of the key takeaways.
Lower Interest Rates, More Commercial Property Loans
The CREF conference deals with investments related to all commercial property types, with a focus on industrial, multifamily, and office properties. Forecasts were generally positive across the spectrum. The MBA released a statement projecting $414 billion in commercial and multifamily loan originations in 2015, rising to $430 billion in 2016.1
The prolonged spell of low interest rates has caused apartment development and lending to cool, but the development of individually owned condominiums and complexes has replaced apartment development as the leading commercial product. Strengthening dynamics in the commercial office market nationwide have made Class A and B office space more desirable, and projects are picking up. The industrial category continues to lag, primarily because the market for manufacturing in the United States, while growing, still suffers from oversupply.
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