MBA: 2Q Commercial/Multifamily Mortgage Debt Outstanding Up by $99.5B
Commercial/multifamily mortgage debt outstanding increased by $99.5 billion (2.3 percent) in the second quarter, the Mortgage Bankers Association reported in its quarterly Commercial/Multifamily Mortgage Debt Outstanding report.
Total commercial/multifamily mortgage debt outstanding rose to $4.38 trillion at the end of the second quarter. Multifamily mortgage debt alone increased $35.7 billion (1.9 percent) to $1.9 trillion from first quarter.
Jamie Woodwell, MBA Vice President of Commercial Real Estate Research, said the $99.5 billion increase in commercial and multifamily mortgage debt outstanding was the second-largest quarterly rise since inception of MBA’s data series in 2007. “The increase in holdings by depositories was the largest on record,” he said. “The data match the fact that the first half of 2022 saw more commercial and multifamily borrowing and lending than any previous January through June period.”
Woodwell noted that given a variety of changes in space, equity and debt markets since the start of the year, MBA expects the pace to slow considerably in coming quarters.
The four largest investor groups are: banks and thrifts; federal agency and government-sponsored enterprise portfolios and mortgage-backed securities; life insurance companies; and commercial mortgage-backed securities, collateralized debt obligation and other asset-backed securities issues.
Commercial banks continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.7 trillion, followed by agency and GSE portfolios and MBS (21 percent) at $919 billion. Life insurance companies hold $648 billion (15 percent), and CMBS, CDO and other ABS issues hold $613 billion (14 percent). Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the report in the CMBS, CDO and other ABS category.
MBA’s 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, CDOs and other ABS for which the security issuers and trustees hold the note (and which appear here under CMBS, CDO and other ABS issues).
MULTIFAMILY MORTGAGE DEBT OUTSTANDING
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS held the largest share of total multifamily debt outstanding in the second quarter at $919 billion (49 percent), followed by banks and thrifts with $558 billion (30 percent), life insurance companies with $187 billion (10 percent), state and local government with $105 billion (6 percent) and CMBS, CDO and other ABS issues holding $68 billion (4 percent).
CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING
In the second quarter, commercial banks saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt–an increase of $51.9 billion (3.2 percent). REITs increased their holdings by $22.3 billion (14.4 percent), life insurance companies increased their holdings by $13.1 billion (2.1 percent) and agency and GSE portfolios and MBS increased their holdings by $8.0 billion (0.9 percent).
In percentage terms, REITs saw the largest increase–14.4 percent–in their holdings of commercial/multifamily mortgages. Conversely, state and local government retirement funds saw their holdings decrease 3.2 percent.
CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING
The $35.7 billion increase in multifamily mortgage debt outstanding from the first quarter represents a quarterly gain of 1.9 percent. In dollar terms, commercial banks saw the largest gain–$28.5 billion (5.4 percent)–in their holdings of multifamily mortgage debt. Agency and GSE portfolios and MBS increased their holdings by $8.0 billion (0.9 percent), and life insurance companies increased by $3.9 billion (2.1 percent).
Bank and thrifts saw the largest percentage increase in their holdings of multifamily mortgage debt, up 5.4 percent. Private pension funds saw the largest decline in their holdings of multifamily mortgage debt at 25.2 percent.
MBA based its analysis on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corporation’s Quarterly Banking Profile and data from Trepp LLC. More information on this data series is contained in Appendix A.
Click here to download MBA’s Commercial/Multifamily Mortgage Debt Outstanding report.