Revealed – how high did commercial and multifamily debt get in Q1?

Gain was spurred by growth from multifamily mortgages

Revealed – how high did commercial and multifamily debt get in Q1?

There was a 1.1% uptick in the overall growth of commercial/multifamily mortgage debt in the first quarter.

According to the Mortgage Bankers Association, total commercial/multifamily debt outstanding grew by $44.6 billion to $3.93 trillion at the end of Q1 2021, with multifamily mortgage debt alone rising $28.8 billion (1.7%) to $1.7 trillion from Q4 2020.

“The pandemic-era growth in the amount of commercial and multifamily mortgage debt outstanding continued during the first quarter, but the growth was not evenly distributed,” said Jamie Woodwell, vice president of commercial real estate research at the MBA.

While all major capital sources increased their holdings of commercial and multifamily mortgages during the quarter, Woodwell noted that nearly two-thirds of the overall growth came from multifamily properties. Furthermore, he said that 80% of that multifamily growth came from agency and GSE mortgage-backed securities and portfolios.

The largest holders of commercial/multifamily mortgages were banks (38% market share) at $1.5 trillion. Agency and GSE portfolios and MBS followed with 22% share at $861 billion. Life insurance companies held $588 billion (15%), while commercial mortgage-backed securities (CMBS), collateralized debt obligation (CDO), and other asset-backed securities (ABS) issues held $540 billion (14%).

“As the uncertainty from the COVID-19 pandemic wanes, lenders will have greater clarity into the different properties and property types and be in stronger positions to make new loans,” Woodwell said.