As the year draws to a close and financing activity accelerates, we dive into the top performing commercial real estate lenders of 2021 across the market.
By Jeff Hamann
Despite a sharp drop in commercial real estate loan originations early last year, lending activity has now returned to pre-pandemic levels. Originations jumped up by 119 percent in the third quarter of 2021 compared to the same time last year, a recent report from the Mortgage Bankers Association shows.
This uptick—pushed by low interest rates alongside a broad improvement in most property sectors’ fundamentals—is a welcome shift, although different asset types have fared differently. Loan originations involving industrial and multifamily properties, often pointed to as the most resilient asset classes, increased by a respective 156 percent and 105 percent. However, the largest jumps involved the beleaguered hospitality and retail sectors, with staggering gains of 866 percent and 317 percent over the year, the MBA report highlights.
As origination volumes continue to build, the lender mix is evolving: Debt funds, mortgage REITs and other alternative lenders were the largest source of new loans in the third quarter, according to a CBRE report, accounting for nearly 40 percent of all originations. The fastest-growing source in commercial lending over the year was in the conduit loan market, which skyrocketed from a 3.9 percent share last year to 17.6 percent in the third quarter of 2021. Of course, traditional commercial banks and life insurance companies remained a critical element of the lender mix, accounting for a respective 23.1 percent and 20.2 percent of new commercial loans during the third quarter.
We have compiled a list of the top 10 commercial lenders of the year by examining the intersection of two leading mortgage banking firm rankings—the Mortgage Bankers Association’s and Commercial Property Executive’s—while weighting additional factors uncovered through a review of publicly available lending data, from loan diversity to recent growth in originations.
TL;DR: Our Best Commercial Real Estate Lenders of 2021 Ranking:
Walker & Dunlop
Meridian Capital Group
The 10 Best Commercial Real Estate Lenders of 2021:
Newmark’s debt and structured finance group, based in Midtown Manhattan, offers borrowers a wide range of financing options and reported $112 billion in capital markets and originations volume for the year ending in September, with debt placement increasing by 126 percent. The firm provides debt placement services for virtually all commercial assets, from data centers to senior housing properties.
9. Wells Fargo
One of the largest financial institutions in the country with just shy of $2 trillion in assets, Wells Fargo reported a total portfolio of extended commercial real estate loans of $110.7 billion at the end of the third quarter this year. This marked a $1.8 billion increase from the previous quarter.
8. JPMorgan Chase
At the end of the third quarter in 2021, JPMorgan Chase held nearly $100.5 billion in commercial loans on its books, the bank disclosed. Although the lender’s quarterly originations have moderated since the beginning of last year, the commercial bank continues to expand its term lending, offering financing packages from $500,000 for multifamily assets and from $1 million for other commercial properties.
Global brokerage firm and capital markets advisor JLL has consistently placed as one of the most active commercial real estate lenders nationwide. This year, the company led MBA’s ranking for sourcing originations from life insurance companies, REITs and specialty groups. Headquartered in Chicago, the organization provides and sources a diverse mix of financing, including construction mortgages, mezzanine debt, and bridge loans.
6. Eastdil Secured
Historically focused primarily on lending and brokerage activities specific to New York commercial real estate, Eastdil Secured has diversified its approach in recent decades. The company operates offices across the U.S., from Atlanta to Seattle, and boasts a growing presence internationally. The organization went private in a management-led buyout in late 2019, when Wells Fargo sold its majority stake in the firm.
5. Meridian Capital Group
Meridian Capital Group has originated a diverse mix of financing from coast to coast, from office construction loans in Los Angeles to mixed-use refinancing packages in New Jersey. The company reported that, in the past five years, it has provided $121 billion in multifamily-backed debt alone, along with $24 billion and $12 billion in the office and retail sectors, respectively.
With lending volume approaching $25 billion for the year through the third quarter of 2020, Berkadia is predominantly focused on multi-housing assets, where it provided upwards of $21 billion in debt originations. The New York firm, founded in 2009 as a joint venture between Berkshire Hathaway and Leucadia National Corp., offers a spectrum of debt, equity, and hybrid financing services.
3. Walker & Dunlop
At the end of 2020, Walker & Dunlop’s loan servicing portfolio totaled $107.2 billion. The Maryland-based lender offers financing options largely targeting the multifamily sector. The company, in addition to offering services as a licensed GSE affiliate, works with a wide range of debt options including non recourse mortgages, small balance loans and HUD/FHA financing.
The world’s largest commercial brokerage firm is also one of the largest commercial lenders, with originations in excess of $40 billion for the 12 months ending in September 2020. The company’s activity is only growing, too, with CBRE reporting a 31.6 percent uptick in commercial loan closings from June to September 2021.
The top lender on the list, Cleveland, Ohio-based KeyBank closed $38.2 billion in commercial originations during the 2020 calendar year, including loans through CMBS markets, pension funds and life insurance companies. Close to one-third of the bank’s lending activity was concentrated in the multifamily realm, with other major focuses in the retail, health care and hospitality sectors.
There have been some truly amazing players in commercial lending this past year, but the absolute cream of the crop can be found on this list. KeyBank definitely deserves its place as the top lender of 2021 with its $38.2 billion in originations, and strong performances by CBRE and Walker & Dunlop on origination volume prove that they aren't too far behind. When looking for a commercial real estate lender, you want to be sure you’re working with an experienced and savvy firm, and we recommend at least starting your search with any of these worthy entities on our top ten list.