Multifamily Debt Reaches $1T in Q2

WASHINGTON, DC—Outstanding commercial/multifamily mortgage debt rose by 1.4% during the second quarter, with multifamily debt hitting $1 trillion, the Mortgage Bankers Association said Tuesday. The quarterly rise of 2.4% for mortgage debt in the apartment sector was nearly twice as fast as the overall increase.

“Rising property values are supporting increased levels of commercial and multifamily mortgage debt,” says Jamie Woodwell, VP for commercial real estate research at MBA. “The total amount of commercial and multifamily mortgage debt outstanding continues to grow at a strong pace, particularly on the multifamily side. For the first time ever, multifamily mortgage debt outstanding now exceeds $1 trillion and is growing at almost 10% per year.”

Although commercial banks hold the largest share of all commercial/multifamily mortgage debt--$1 trillion, or 37% of the $2.72-trillion total—within multifamily the major investor group is GSEs and agency MBS. The group holds $437 billion, or 43% of the total multifamily debt outstanding, and also saw one of the biggest quarterly gains at 3.4%.

The GSEs are followed as lenders in the multifamily space by banks and thrifts with $315 billion, or 31% of the total. Next comes state and local government retirement funds, which hold $87 billion, or 9% of the total; CMBS, CDO and other ABS issues with $72 billion, or 7%; life companies with $58 billion, or 6%; and the federal government with the remaining 1%.

In percentage terms, state and local governments recorded the largest quarterly increase in holdings of multifamily mortgages, at 6%. After the GSEs and agency MBS, the third fastest increase was by commercial banks, which increased their holdings by 9.9%, or 3.2%.  Commercial banks increased their holdings of multifamily mortgage debt by $9.9 billion, or 3.2 percent. Life companies increased by $1.3 billion, or 2.2%. 

CMBS, CDO and other ABS issues saw the largest decline by dollar amount in their holdings of multifamily mortgage debt: $1.6 billion. On a percentage basis, finance companies saw the biggest decrease at 38%.

In two separate panel discussions, the GSEs and other sources of mortgage financing will be on the agenda for this year's RealShare Apartments conference, scheduled for Oct. 21-22 at the Westin Bonaventure in Los Angeles. Click here for further information and to register for the conference.