MBA Finds CRE Debt Increases by $30B in 2012

Commercial and multifamily debt outstanding increased nearly $30 billion during 2012, with a 4Q12 increase of nearly $22 billion, the Mortgage Bankers Association said.

Multifamily mortgage debt outstanding rose to $846 billion, an increase of $11.8 billion or 1.4% from the third quarter, and $35.7 billion or 4.4% from 4Q11.

Jamie Woodwell, MBA’s vice president of commercial real estate research, noted, “The fourth quarter saw the largest increase in commercial and multifamily mortgage debt outstanding since 2008. Bank-held commercial mortgages increased by the largest amount since 2008. The balance of loans held in CMBS rose by the most since 2007 and the balances of loans held by life companies and held or guaranteed by Fannie Mae, Freddie Mac and FHA continued their multiyear increases.”

During the fourth quarter, the government-sponsored enterprises combined contributed to $7.6 billion of the increase in multifamily debt and commercial banks added $6.2 billion. However, state and local governments cut their holdings by $1.4 billion and commercial mortgage-backed securities issuers cut theirs by $1.2 billion.

For total commercial and multifamily debt, banks and thrifts added $17 billion, with the GSE’s $7.6 billion representing the second largest increase. Finance companies had a $6 billion decline in their debt holdings.

By sector, banks and thrifts hold 35% of commercial and multifamily debt, followed by CMBS issuers at 23%, the GSEs at 16% and life insurance companies at 14.