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Top 10 Commercial Real Estate Lenders of 2021
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 MBA’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.
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.
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.
What are the best commercial real estate lenders of 2021?
The 10 Best Commercial Real Estate Lenders of 2021 are:
- Walker & Dunlop
- Meridian Capital Group
- Eastdil Secured
- JPMorgan Chase
- Wells Fargo
What are the most competitive rates for commercial real estate loans in 2021?
The most competitive rates for commercial real estate loans in 2021 will depend on a variety of factors, including the type of loan, the size of the loan, the borrower's credit score, and the current market conditions. Generally, the best rates are available to borrowers with strong credit scores and a large loan amount. Additionally, rates can vary significantly depending on the type of loan and the lender.
At Commercial Real Estate Loans, we have relationships with a vast network of lenders across the country, and we leverage that to provide the very best loan terms available. Fill out the form on our website to get a free quote and find the most competitive rates for your commercial real estate loan in 2021.
What are the most important factors to consider when choosing a commercial real estate lender?
When choosing a commercial real estate lender, there are several important factors to consider. These include the interest rate, fees, repayment terms, and the purpose of the loan. It is also important to have a well-thought-out business plan in place to demonstrate to the lender that you have the financial resources to make a down payment and cover closing costs. Additionally, it is recommended to negotiate with lenders to get more favorable terms.
What are the advantages and disadvantages of working with a commercial real estate lender?
The advantages of working with a commercial real estate lender include a faster and more lenient application process, and higher interest rates than bank loans. The disadvantage is that the interest rates may be higher than those offered by banks.
Your interest rate will depend on your loan-to-value ratio (LTV), type of business, credit score, and overall financial health and stability. In addition to a 20% - 30% down payment, you will also need to pay other upfront fees, like:
- Property appraisal
- Survey fees
- Legal Costs
- Loan origination
The commercial loan broker helps the borrower understand the loan and its guidelines, prepares a loan application that can increase your chances for success, and represents the borrower’s interests throughout the process.
What are the best strategies for negotiating with a commercial real estate lender?
Negotiating with a commercial real estate lender can be a tricky process. Here are some tips to help you get the best deal:
- Do your research. Make sure you understand the terms of the loan and the current market conditions. This will help you determine what is a fair deal.
- Be prepared to negotiate. Have a clear idea of what you want and be willing to compromise. Be sure to have all the necessary documents and information ready.
- Be flexible. Consider different loan terms and repayment options. You may be able to get a better deal if you are willing to be flexible.
- Shop around. Don't be afraid to compare different lenders and loan products. This will help you find the best deal.
- Be persistent. Don't be afraid to ask for a better deal. Lenders may be willing to negotiate if you are persistent.
These strategies can help you get the best deal when negotiating with a commercial real estate lender. For more information, check out this article.