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Commercial, Multifamily Mortgage Debt Hits Record

MAR 12, 2014 5:01pm ET
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Commercial and multifamily mortgage debt outstanding reached a record high during the fourth quarter, erasing the declines caused by the recession.

Overall, there was $2.5 trillion in commercial and multifamily mortgage debt outstanding through the end of 2013, up 3.7% from 2012, according to data from the Mortgage Bankers Association.

Banks and thrifts continue to hold the largest share of this type of mortgage debt with $897 billion, or 36%, of the total. The bank and thrift figure is up on a yearly basis by $62 billion, representing 7% of commercial and multifamily mortgage holdings.

Meanwhile, commercial mortgage-backed securities, collateralized debt obligations and other asset-backed securities increased their holdings of commercial and multifamily mortgages year-over-year by 1.9%, to $567 billion, accounting for 22% of overall outstanding debt.

Agency and government-sponsored enterprise portfolios and mortgage-backed securities hold $391 billion, 15% of the total, while life insurance companies make up $336 billion of the amount.

The largest decrease in commercial and multifamily mortgage debt outstanding from the end of December 2012 to the following year was found in state and local government retirement funds, which fell 30%, to $4.4 billion.

Finance companies’ share of commercial and multifamily mortgages fell 10% year over year, to $42.2 billion.

Multifamily mortgage debt outstanding rose to $895 billion uptick in the fourth quarter of 2013, up nearly 4.3% from previous year. Agency and GSE portfolios, as well as mortgage-backed securities, hold the largest share of multifamily mortgage debt principal, with $391 billion.

The MBA's analysis is based on data from the Federal Reserve Board's flow of funds account and the Federal Deposit Insurance Corp.’s quarterly banking profile.

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