MBA: 3Q Holdings of Commercial/Multifamily Mortgage Debt Increase
Commercial/multifamily mortgage debt outstanding increased by $64.8 billion (1.6 percent) in the third quarter, according to the Mortgage Bankers Association’s latest Commercial/Multifamily Mortgage Debt Outstanding report.
Total commercial/multifamily debt outstanding rose to $4.05 trillion. Multifamily mortgage debt alone increased by $26.6 billion (1.5 percent) to $1.8 trillion from the second quarter.
“Every major investor group increased their holdings of commercial and multifamily mortgages during the third quarter, as many property types have healed considerably since the shutdowns at the onset of the COVID-19 pandemic in early 2020,” said Jamie Woodwell, MBA Vice President of Commercial Real Estate Research.
Woodwell said strong interest from both borrowers and lenders will likely continue to drive increases in commercial and multifamily mortgage debt in 2022.
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 $1.5 trillion. Agency and GSE portfolios and MBS follow (22 percent) at $885 billion. Life insurance companies hold $609 billion (15 percent) and CMBS, CDO and other ABS issues hold $564 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.
The MBA 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 in the third quarter, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $885 billion (50 percent), followed by banks and thrifts with $496 billion (28 percent), life insurance companies with $177 billion (10 percent), state and local government with $106 billion (6 percent) and CMBS, CDO and other ABS issues with $55 billion (3 percent). Nonfarm non-corporate businesses hold $20 billion (1 percent).
CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING
Commercial banks saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt in the third quarter, an increase of $20.9 billion, or 1.4 percent. Agency and GSE portfolios and MBS increased their holdings by $14.1 billion (1.6 percent), life insurance companies increased their holdings by $12.9 billion (2.2 percent) and real estate investment trusts increased their holdings by $7.8 billion (7.7 percent).
In percentage terms, REITs saw the largest increase–7.7 percent–in their holdings of commercial/multifamily mortgages. Conversely, private pension funds saw their holdings decrease 4.9 percent.
CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING
The $26.6 billion increase in multifamily mortgage debt outstanding during the quarter represented a 1.5 percent gain. In dollar terms, agency and GSE portfolios and MBS saw the largest gain–$14.1 billion or 1.6 percent–in their holdings of multifamily mortgage debt. Commercial banks increased their holdings by $5.6 billion (1.1 percent) and life insurance companies increased by $3.8 billion (2.2 percent).
REITs saw the largest percentage increase in their holdings of multifamily mortgage debt, up $649 million (9.5 percent). Private pension funds saw the largest decline in their holdings of multifamily mortgage debt, down $65 million (14.3 percent).
The MBA Commercial/Multifamily Mortgage Debt Outstanding report can be downloaded here.
MBA’s analysis is based on data from the Federal Reserve Board’s Financial Accounts of the United States, the Federal Deposit Insurance Corp.’s Quarterly Banking Profile and data from Wells Fargo Securities. More information on this data series can be found in Appendix A.
