MBA: Significant turning point for CMBS market

by Steve Randall13 Dec 2017
The third quarter of 2017 saw a resurgence of the commercial/multifamily mortgage sector with a rise of $45.4 billion to $3.11 trillion.

The 1.5% increase saw all four major investor groups increase their holdings, including CMBS, reversing almost a decade of quarterly decline for the sector, the Mortgage Bankers Association reports.

The third quarter marks a significant turning point for the CMBS market. With only a few exceptions, since 2008, the balance of commercial and multifamily mortgages held in CMBS has declined each quarter. That years-long trend ended this quarter," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.

He added that the third quarter saw the largest increase in outstanding CMBS mortgages since the end of 2007. 

"With the so-called 'wall of maturities' behind us, and a vibrant market for new originations, we are once again seeing more new loans being originated for CMBS than we are seeing in old loans paying off and paying down,” Woodwell explained.

Multifamily mortgage debt was up 2.1% in the quarter compared to the second quarter of 2017, to a total of $1.2 trillion. Agency and GSE portfolios and MBS hold the largest share, with $573 billion, or 47 percent of the total multifamily debt outstanding.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $1.3 trillion, 40% of the total. Agency and GSE portfolios and MBS saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $19.8 billion, or 3.6%.

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