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Commercial, Multifamily Mortgage Debt Takes 2Q Leap

Phil Hall
Sep 20, 2016
Commercial and multifamily mortgage debt outstanding grew by $39.9 billion in the second quarter

Commercial and multifamily mortgage debt outstanding grew by $39.9 billion in the second quarter, according to data released by the Mortgage Bankers Association (MBA). Multifamily mortgage debt outstanding rose by 2.6 percent to reach $1.09 trillion, while the total commercial and multifamily debt outstanding increased 1.4 percent to $2.90 trillion.

Commercial banks held the largest share of commercial/multifamily mortgages in the second quarter, with $1.1 trillion or 39 percent of the total, while agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities were the second-largest holders with $486 billion or 17 percent of the total. Commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDO) and other asset-backed securities (ABS) issues held $484 billion, or 17 percent of the total, while life insurance companies held $407 billion, or 14 percent of the total.

In focusing solely on the multifamily market, the MBA noted that the $27.6 billion spike in multifamily mortgage debt outstanding between the first and second quarters was a 2.6 percent increase. Agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt, an increase of $13.8 billion, or 2.9 percent, while commercial banks increased their multifamily mortgage debt holdings by $13.1 billion, or 3.7 percent, and life insurance companies increased by $1.6 billion, or 2.6 percent. However, CMBS, CDO and other ABS issues saw the largest decline in their holdings of multifamily mortgage debt, by $1.7 billion, or down 3.1 percent. Banks and thrifts recorded the largest increase in holdings of multifamily mortgages, at 3.7 percent, while real estate investment trusts saw the biggest decrease at 12.3 percent.

"The amount of commercial and multifamily mortgage debt outstanding grew to a new record during the second quarter, despite a record drop in the balance of commercial mortgage-backed securities loans outstanding," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "The CMBS market is seeing far more loans paying off and paying down than new loans being originated." 

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