Commercial, multifamily mortgage debt spikes to $4.45 trillion

Increase comes amid downturn in commercial and multifamily originations

Commercial, multifamily mortgage debt spikes to $4.45 trillion

Total commercial and multifamily mortgage debt outstanding rose by $70 billion in the third quarter, according to data from the Mortgage Bankers Association.

MBA’s quarterly report showed a 1.6% increase in commercial/multifamily mortgage debt outstanding, hitting $4.45 trillion at the end of the third quarter. Multifamily mortgage debt accounted for $1.93 trillion of the total figure, up by 1.9% or $36.1 billion from the previous quarter.

“The amount of commercial and multifamily mortgage debt outstanding increased during the third quarter, driven almost entirely by a large increase in the portfolio holdings of banks and other depositories,” said Jamie Woodwell, head of commercial real estate research at MBA. “The increase in bank holdings was the largest quarterly increase of any individual capital source in the history of MBA’s series. For most other capital sources, their holdings of commercial and multifamily mortgages grew at a slower rate than during the second quarter of 2022.”

Commercial banks remained the largest shareholder of commercial/multifamily loans with 38% ($1.7 trillion). Agency and GSE portfolios and MBS came in second with 21% (926 billion), followed by life insurance companies with 15% ($655 billion), and CMBS, CDO and other ABS with 14% ($610 billion).

“The results generally match those of MBA’s Quarterly Originations Index, which showed third-quarter 2022 originations down 13% on a quarterly basis, with depositories the sole major capital source to see an increase,” Woodwell said.

In an earlier interview, Woodwell said market volatility has made the sizing of transactions “extremely difficult,” thus leading to Q3’s depressed borrowing and lending activity.