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Commercial Mortgage Debt Outstanding Up

SEP 27, 2013 12:28pm ET
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Strong investor appetite helped increase the nation’s outstanding commercial/multifamily mortgage debt by $24.5 billion in the second quarter.

If only 1% higher compared to the first quarter 2013, according to the Mortgage Bankers Association, it brought the total volume up to $2.45 trillion.

A handful of major investor groups helped increase the overall multifamily mortgage debt to $875 billion, a 1.3% increase, or $10.9 billion, from the first quarter of 2013.

REITs recorded the largest increase in holdings of multifamily mortgages, at 31%.

The trend has been persistent during 2013.

According to the MBA’s VP of commercial real estate research, Jamie Woodwell, during the quarter banks increased their holdings of commercial and multifamily mortgages by $16 billion.

Commercial banks continue to hold $855 billion in such assets, or 35% of the total and the largest share of commercial/multifamily mortgages. At $7.4 billion, or 3%, these banks also saw the largest quarter increase in multifamily mortgage debt holdings.

Other entities currently active in this mortgage space, he said, include many life insurance companies, banks and the GSEs.

For example, Fannie Mae, Freddie Mac and FHA increased their multifamily holdings and guarantees by $5.6 billion and life insurance companies increased their commercial and multifamily holdings by $4 billion.

The report, which reviews both whole loans and loans securitized in commercial mortgage-backed securities, collateralized debt obligations and other asset backed securities, also found that the second largest holders of commercial/multifamily debt are CMBS, CDO and other ABS issues at $557 billion, or 23% of the total.

Multifamily mortgages, agency and GSE portfolios and MBS hold the largest share, with $388 billion, or 44% of the total multifamily debt, followed by banks and thrifts with $244 billion, or 28%.

Nonetheless, in the second quarter the household sector saw the largest decrease at $1.9 billion, or 43%.

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