Commercial and Multifamily Mortgage Debt Outstanding Increases by $37 Billion in Q3

The Mortgage Bankers Association (MBA) said on Thursday (12-14-23) in its latest Commercial/Multifamily Mortgage Debt Outstanding report that in Q3, the level of commercial and multifamily mortgage debt outstanding increased 0.8% to $37.1 billion.

According to the MBA, total commercial and multifamily mortgage debt outstanding increased to $4.63 trillion at the end of Q3. Multifamily mortgage debt alone increased 1.3%, or $26.8 billion, from $2.05 trillion in Q2.

MBA says the four largest investor groups are: 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.

The corresponding breakdown is as follows:

• Commercial banks continue to hold the largest share with 38% of commercial/multifamily mortgages, or $1.8 trillion.
• Agency and GSE portfolios and MBS are the second-largest holders of commercial/multifamily mortgages with 21%, or $986 billion.
• Life insurance companies hold $702 billion, or 15%.
• CMBS, CDO, and other ABS issues hold $593 billion, or 13%. 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.

Comment on the report, MBA Head of Commercial Real Estate Research Jamie Woodwell said:

“The level of commercial mortgage debt outstanding has continued to increase despite a continued pullback in borrowing. A decline in sales transaction and refinance volumes has meant less new debt being extended, but it also means that fewer loans are paying off than in many earlier periods. The result is that debt levels continue to rise, but at a pace that is roughly half of what was seen last year.”