Based on the Mortgage Bankers Association’s latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report, the level of commercial and multifamily mortgage debt outstanding in the U.S. increased by $40.1 billion (0.9 percent) in the first quarter of 2024.
Total commercial/multifamily mortgage debt outstanding rose to $4.70 trillion at the end of the first quarter. Multifamily mortgage debt alone increased $23.7 billion (1.1 percent) to $2.10 trillion from the fourth quarter of 2023.
“The amount of commercial mortgage debt outstanding increased in the first quarter of 2024, despite slow mortgage originations activity,” said Jamie Woodwell, MBA’s Head of Commercial Real Estate Research. “Every major capital source increased its holdings of commercial mortgages, as fewer loans than usual were paid off through property sales or refinancings.”
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.
Commercial banks continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.8 trillion. Agency and GSE portfolios and MBS are the second-largest holders of commercial/multifamily mortgages (22 percent) at $1.01 trillion. Life insurance companies hold $720 billion (15 percent), and CMBS, CDO and other ABS issues hold $604 billion (13 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.
MBA’s 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 first quarter of 2024, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $1.01 billion (48 percent), followed by banks and thrifts with $620 billion (30 percent), life insurance companies with $230 billion (11 percent), state and local government with $117 billion (6 percent), and CMBS, CDO and other ABS issues holding $67 billion (3 percent).
CHANGES IN COMMERCIAL/MULTIFAMILY MORTGAGE DEBT OUTSTANDING
In the first quarter, banks and thrifts saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $12.8 billion (0.7 percent). CMBS, CDO and other ABS issues increased their holdings by $11.0 billion (1.9 percent), agency and GSE portfolios and MBS increased their holdings by $10.2 billion (1.0 percent), and life insurance companies increased their holdings by $7.0 billion (1.0 percent).
In percentage terms, CMBS, CDO and other ABS issues saw the largest increase – 1.9 percent – in their holdings of commercial/multifamily mortgages. Conversely, state and local government retirement funds saw their holdings decrease 8.3 percent.
CHANGES IN MULTIFAMILY MORTGAGE DEBT OUTSTANDING
The $23.7 billion increase in multifamily mortgage debt outstanding from the fourth quarter of 2023 represents a quarterly gain of 1.1 percent. In dollar terms, agency and GSE portfolios and MBS issues saw the largest gain – $10.2 billion (1.0 percent) – in their holdings of multifamily mortgage debt. Bank and thrifts increased their holdings by $9.1 billion (1.5 percent), and life insurance companies increased by $3.8 billion (1.7 percent).
Nonfinancial corporate business saw the largest percentage increase in their holdings of multifamily mortgage debt, up 3.2 percent. REITs saw the largest decline in their holdings of multifamily mortgage debt at 9.7 percent.
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