Commercial/Multifamily Mortgage Debt Rises Above $3 Trillion
June 13, 2017
According to the Mortgage Bankers Association (MBA), total commercial/multifamily debt outstanding rose to $3.01 trillion at the end of the first quarter of 2017, the first time it has broken the $3 trillion mark. Multifamily mortgage debt outstanding rose to $1.17 trillion, an increase of $23.4 billion, or 2.0 percent, from the fourth of quarter of 2016.
“The amount of commercial and multifamily mortgage debt outstanding continued to grow during the first quarter,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “Almost two-thirds of the growth came from increases in multifamily mortgage debt outstanding, and 80 percent of that growth came from portfolios and MBS held or guaranteed by federal government agencies and the GSEs. In addition, recent releases from the Federal Reserve show that during the second quarter of 2017, bank multifamily portfolios stopped growing and remain relatively flat, while their holdings of other commercial property loans have continued to grow.”
The level of commercial/multifamily mortgage debt outstanding rose by $37.6 billion in the first quarter of 2017, a 1.3 percent increase over the fourth quarter of 2016, with three of the four major investor groups increasing their holdings.
The four major investor groups are: bank and thrift; commercial mortgage backed securities (CMBS), collateralized debt obligation (CDO) and other asset backed securities (ABS) issues; federal agency and government sponsored enterprise (GSE) portfolios and mortgage backed securities (MBS); and life insurance companies.
Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $1.2 trillion, or 41 percent of the total.
Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages, holding $540 billion, or 18 percent of the total. CMBS, CDO and other ABS issues hold $438 billion, or 15 percent of the total, and life insurance companies hold $436 billion, or 15 percent of the total. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the “CMBS, CDO and other ABS” category.
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