MBA Special Report: Cautious Optimism in 2017

By Sanyu Kyeyune

MBA’s Michael Fratantoni and Jamie Woodwell

San Diego—The Mortgage Bankers Association’s CREF/Multifamily Housing Convention & Expo 2017 is in full swing at the Manchester Grand Hyatt in San Diego. At the conference, professionals from all aspects of real estate finance have converged to discuss how the industry will respond to impending regulatory changes, demographic shifts, global movements and opportunities to diversify the commercial real estate workforce.

Formerly CEO & Co-CIO of PIMCO, Allianz CEO Mohamed El-Erian opened the conference with a session on the global economy’s impact on commercial real estate financing. In his presentation, El-Erian shared four critical areas that are likely to shape the industry in 2017: credit quality, interest rates, market liquidity and the preferences of users and sources of capital.

MBA Chairman Rodrigo López, CMB, pointed out three components of MBA’s blueprint for 2017: ensuring regulations promote the efficient flow of capital, deploying transformational technology to better serve customers and developing a workforce as diverse as its customers.

Michael Fratantoni, MBA’s ‎chief economist & SVP of research and industry technology, presented some of the association’s research findings and predictions for 2017. “We’re seeing super favorable demographics for young spenders,” noted Fratantoni, a shift that bodes well for multifamily investors seeking to target new prospects.

“Nationally, commercial real estate fundamentals and prices remain strong,” said Jamie Woodwell, MBA’s VP of Commercial Real Estate Research, in a prepared statement. “That overall strength is expected to continue to support active sales and mortgage markets.”

In 2017, the MBA predicts that commercial and multifamily mortgage debt outstanding should exceed $3 billion by year end, a figure nearly four percent higher than at the end of 2016.

“We’re trying to really emphasize that creating one small change in a broad, sweeping tax reform policy can have a rippling effect on all of us,” said David H. Stevens, president & CEO of MBA. Underscoring the importance of acting as a united front, he continued, “As MBA members…we need to help shape the policy before decisions and opinions are locked in the minds of Congress and other legislators.”