Magazine article Mortgage Banking

Commercial/multifamily Debt Outstanding Reaches Record $2.9 Trillion

Magazine article Mortgage Banking

Commercial/multifamily Debt Outstanding Reaches Record $2.9 Trillion

Article excerpt

Commercial and multifamily mortgage debt outstanding increased by $39.9 billion in the second quarter as three of the four major investor groups increased their holdings, the Mortgage Bankers Association (MBA) reported. [paragraph] According to the MBA Commercial/Multifamily Mortgage

Debt Outstanding Report, total commercial and multifamily debt outstanding rose 1.4 percent during the second quarter to $2.90 trillion. Multifamily mortgage debt outstanding rose by 2.6 percent to reach $1.09 trillion.

"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 [CMBS] loans outstanding," said Jamie Woodwell, MBA vice president of commercial real estate research. "The CMBS market is seeing far more loans paying off and paying down than new loans being originated."

Woodwell said banks, Fannie Mae, Freddie Mac, life companies and others continued to increase their commercial and multifamily mortgage holdings in the second quarter, which more than offset falling CMBS issuance.

The analysis summarizes the holdings of loans or, if the loans are securitized, the form of the security. For example, many life insurance companies invest both in whole loans for which they hold the mortgage note (and which appear in MBA's data under the category of life insurance companies) and in CMBS, collateralized debt obligations (CDOs) and other asset-backed securities (ABS) for which the security issuers and trustees hold the note (and which appear in the data under CMBS, CDO and other ABS issues).

Commercial banks continue to hold the largest share of commercial/multifamily mortgages with $1.1 trillion or 39 percent of the total, Woodwell said.

Agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS) represent the second-largest holders of commercial/multifamily mortgages, holding $486 billion, or 17 percent of the total.

CMBS, CDO and other ABS issues hold $484 billion, which equals 17 percent of the total; and life insurance companies hold $407 billion, which is 14 percent of the total, MBA said. 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.

Multifamily mortgage debt outstanding

Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $486 billion, or 44 percent of the total multifamily debt outstanding. …

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