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Last updated on February 3rd, 2021 at 11:33 am
According to the Mortgage Bankers Association latest Commercial/Multifamily mortgage debt outstanding quarterly report.
In the second quarter of 2020, the level of commercial/multifamily mortgage debt outstanding rose by $43.6 billion (1.2%).
Total commercial/multifamily debt outstanding was at $1.6 trillion from the first quarter and now has risen to $3.76 trillion at the end of the second quarter of 2020. Multifamily mortgage debt alone increased $32.2 billion (2.0%).
Jamie Woodwell MBA’s Vice President of Commercial Real Estate Research said,
“Despite a drop off in new commercial and multifamily mortgage originations in the second quarter, the total amount of mortgage debt outstanding continued to rise.
The pandemic is having different impacts on various property types and capital sources.
Loans backed by multifamily properties accounted for almost three-quarters of the total growth, and Fannie Mae, Freddie Mac, and FHA accounted for nearly three-quarters of that amount.”
Banks and thrifts; federal agency and government-sponsored enterprise (GSE) portfolios and mortgage-backed securities (MBS); life insurance companies; and commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO) and other asset-backed securities (ABS) issues are the four largest investor groups.
Commercial banks continue to hold the largest share (39%) of commercial/multifamily mortgages at $1.5 trillion.
Agency and GSE portfolios and MBS are the second-largest holders of commercial/multifamily mortgages (21%) at $775 billion.
Life insurance companies hold $574 billion (15%), and CMBS, CDO, and other ABS issues hold $518 billion (14%).
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.
Looking solely at multifamily mortgages in the second quarter of 2020, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $775 billion (48%), followed by banks and thrifts with $474 billion (30%), life insurance companies with $167 billion (10%), state and local government with $93 billion (6 % ), and CMBS, CDO and other ABS issues holding $53 billion (3%).
Nonfarm non-corporate businesses hold $21 billion (1%).
The $32.2 billion increase in multifamily mortgage debt outstanding from the first quarter of 2020 represents a 2.0 percent increase.
In dollar terms, agency and GSE portfolios and MBS saw the largest gain – $22.9 billion (3.1%) – in their holdings of multifamily mortgage debt.
Life insurance companies increased their holdings by $2.5 billion (1.5%), and state and local government increased by $1.4 billion (1.5%).
REITs saw the largest decline in their holdings of multifamily mortgage debt, down $602 million (11.8%).
In percentage terms, agency and GSE portfolios and MBS saw the largest increase – 3.1% – in their holdings of commercial/multifamily mortgages. Conversely, REITs saw their holdings decrease by 3.0%.
Reference Source: Property Journal
