MBA: Commercial/MF Debt Hits $2.5T

Commercial and multifamily mortgage debt outstanding reached the $2.5 trillion mark in the third quarter, representing a 3.4% increase of $83.8 billion from that of the previous quarter, according to a Mortgage Bankers Association analysis of flow-of-funds data from the Federal Reserve Board.Considering debt backed by multifamily properties alone, there was a 1.5% rise, to $641 billion, in debt outstanding at the end of the third quarter. "The commercial/multifamily mortgage market continues to be buoyed by modest long-term interest rates, improving property fundamentals, and strong equity flows," said Doug Duncan, the MBA's chief economist. Commercial banks hold $1.1 trillion of the debt outstanding, representing 43% of the total (commercial banks also sometimes report commercial and industrial loans that are backed by the borrower's business income). CMBS pools hold 20% of the total, followed by life insurance companies with 10%, and savings institutions with 8%. Fannie Mae, Freddie Mac, and Ginnie Mae hold another 8% of the debt outstanding. The MBA can be found online at http://www.mortgagebankers.org.