Commercial and multifamily mortgage maturities to increase in 2020

by Candyd Mendoza12 Feb 2020

Around 7% of outstanding commercial and multifamily mortgages will mature in 2020, according to the Mortgage Bankers Association.

MBA’s Commercial Real Estate/Multifamily survey showed that loan maturity volumes would rise 28% this year from the $110.5 billion that matured the year prior. Over $163 billion of the $2.2 trillion of mortgages held by non-bank lenders and investors will mature in 2020.

"Commercial and multifamily mortgage maturities will rise this year from the low levels of the last two years," said Jamie Woodwell, vice president of commercial real estate research at MBA. "Given the long-term nature of many commercial mortgages, maturities remain muted, with just 7% of the total balance of non-bank-held mortgages maturing in 2020. This is particularly true for multifamily mortgages held or guaranteed by Fannie Mae, Freddie Mac, and FHA, of which less than 2% of the outstanding balance will mature.”

Of the outstanding balance of multifamily and healthcare mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA, and Ginnie Mae, just $11.9 billion (2%) will mature in 2020. Meanwhile, $24.8 billion (4%) of the outstanding mortgage balances of life insurance companies, and the $67.2 billion (11%) held in CMBS will come due. Commercial mortgages held by credit companies and other investors will see the largest share of loan maturities this year at $59.3 billion (24%).

“Loans made by investor-driven lenders, such as mortgage REITs, debt funds, and credit companies, tend to be shorter-term, which is why nearly one-quarter of the outstanding balance of those loans will mature in 2020,” Woodwell said. “This year marks the beginning of a 'return to normalcy' after the so-called 'wall of maturities' in 2016 and 2017, and the 'trough of maturities' in 2018 and 2019," Woodwell said.