MBA: Commercial/Multifamily Debt Outstanding Reaches Record $2.9T

Ahmad, Ali aahmad@mba.org

September 20, 2016


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 reported today.

The MBA Commercial/Multifamily Mortgage Debt Outstanding Report said 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 loans outstanding," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "The [commercial mortgage-backed securities] 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 this data under Life Insurance Companies) and in CMBS, collateralized debt obligations and other asset-backed securities for which the security issuers and trustees hold the note (and which appear here 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 portfolios and mortgage-backed securities represent the second-largest holders of commercial/multifamily mortgages, holding $486 billion, or 17 percent of the total. 

CMBS, CDO and other asset-backed securities 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. Banks and thrifts follow with $365 billion, or 33 percent. State and local governments hold $90 billion, or 8 percent; life insurance companies hold $64 billion, or 6 percent; CMBS, CDO and other ABS issues hold $55 billion, or 5 percent . Nonfarm non-corporate business hold $14 billion, or 1 percent.

Changes in Commercial/Multifamly Mortgage Debt Outstanding
In dollar terms, banks and thrifts saw the largest increase in their holdings of commercial/multifamily mortgage debt in the second quarter with a $36.1 billion or 3.3 percent increase. Agency and GSE portfolios and MBS increased their holdings by $13.8 billion, or 2.9 percent, and life insurance companies increased their holdings by $8.9 billion, or 2.2 percent. CMBS, CDO and other ABS issues saw the largest decrease at $20.9 billion, or down 4.1 percent.  

In percentage terms, household sector saw the largest increase in their holdings of commercial/multifamily mortgages, an increase of 3.4 percent. Finance companies saw their holdings decrease 6.8 percent.

Changes in Multifamily Mortgage Debt Outstanding
The $27.6 billion increase in multifamily mortgage debt outstanding between the first and second quarters represents a 2.6 percent increase.

In dollar terms, 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. Commercial banks increased their multifamily mortgage debt holdings by $13.1 billion, or 3.7 percent. Life insurance companies increased by $1.6 billion, or 2.6 percent. 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.

In percentage terms, bank and thrifts recorded the largest increase in holdings of multifamily mortgages, at 3.7 percent. Real estate investment trusts saw the biggest decrease at 12.3 percent. 

MBA based its analysis on data from the Federal Reserve Board's Financial Accounts of the United States, the Federal Deposit Insurance Corp.'s Quarterly Banking Profile and data from Wells Fargo Securities. More information on this data series is contained in Appendix A. Click here to access the report.

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