The level of commercial/multifamily mortgage debt outstanding increased by $24.9 billion in the second quarter of 2014, as three of the four major investor groups increased their holdings, according to a new report from the Mortgage Bankers Association (MBA). That is a 1 percent increase over the first quarter of 2014.
Total commercial/multifamily debt outstanding stood at $2.56 trillion in the second quarter. Multifamily mortgage debt outstanding rose to $930 billion, an increase of $13.0 billion, or 1.4 percent, from the first quarter of 2014.
"The balance of commercial and multifamily mortgage credit has continued to grow and reached another new high in the second quarter," Jamie Woodwell, MBA’s vice president of research and economics, said in a statement. "The balance of mortgage debt extended to multifamily apartment owners grew by 1.4 percent during the quarter and now stands 26 percent above the level seen at the end of 2007, prior to the recession."
Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $930 billion, or 36 percent of the total.
CMBS, CDO and other ABS issues are the second-largest holders of commercial/multifamily mortgages, holding $533 billion, or 21 percent of the total. Agency/GSE portfolios and MBS hold $392 billion, or 15 percent of the total, and life insurance companies hold $346 billion, or 14 percent of the total.
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $392 billion, or 42 percent of the total multifamily debt outstanding. They are followed by banks and thrifts with $282 billion, or 30 percent of the total. State and local government hold $89 billion, or 10 percent of the total; CMBS, CDO and other ABS issues hold $75 billion, or 8 percent of the total; life insurance companies hold $55 billion, or 6 percent of the total; and nonfarm, noncorporate business holds $15 billion, or 2 percent of the total.
In the second quarter of 2014, banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $16.3 billion, or 1.8 percent. Life insurance companies increased their holdings by $4.3 billion, or 1.3 percent, and REITs increased their holdings by $2.3 billion, or 6.3 percent. CMBS, CDO and other ABS issues saw the largest decrease at $2.3 billion, or down 0.4 percent.
