WASHINGTON, DC—The level of commercial/multifamily mortgage debt outstanding increased by $25.2 billion in the third quarter of 2013, the largest increase since 2008, the Mortgage Bankers Association reports. All four major investor groups increased their holdings, registering a 1% increase over the second quarter of 2013.

"The third quarter also marked the largest increase in the outstanding balance of loans in commercial mortgage backed securities since 2007. There were increases in the holdings of every major investor group," according to Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.

According to MBA, total commercial/multifamily debt outstanding stood at $2.47 trillion in the third quarter. Multifamily mortgage debt outstanding rose to $887 billion, an increase of $10.8 billion, or 1.2%, from the second quarter.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $870 billion, or 35% of the total, according to MBA.

CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $563 billion, or 23% of the total. Agency/GSE portfolios and MBS hold $391 billion, or 16% of the total, and life insurance companies hold $333 billion, or 14% of the total.

MBA notes that many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues--loans that appear in the "CMBS, CDO and other ABS" category of this chart.

Banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $14.5 billion, or 1.7%. Life insurance companies increased their holdings by $7.1 billion, or 2.2%, and CMBS, CDO and other ABS issues increased their holdings by $5.9 billion, or 1.1%.

The household sector saw the largest decrease at $2.0 billion, or 80.4 percent.

In percentage terms, other insurance companies saw the largest increase in their holdings of commercial/multifamily mortgages, an increase of 7%. The household sector saw their holdings decrease 80%.

Instant Insights /

Commercial Mortgage/Multifamily Debt Explodes in Q3

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