The second-quarter volume of commercial and multifamily mortgage debt outstanding increased $24.9 billion, or 1%, from the previous quarter, according to the Mortgage Bankers Association, as some of the top investors increase their holdings.
The total commercial and multifamily debt outstanding was $2.56 trillion in the second quarter, the MBA said. Multifamily mortgages represented $930 billion of the debt outstanding, up 1.4%, from the first quarter of 2014.
"The balance of mortgage debt extended to multifamily apartment owners grew by 1.4% during the quarter and now stands 26% above the level seen at the end of 2007, prior to the recession," reaching a new high, said Jamie Woodwell, the MBA's vice president of research and economics.
Agency, government-sponsored entity and mortgage-backed security portfolios increased by $972 million, or 0.2%, bringing the balance up to $392 billion, or 15% of the total, the second largest after commercial banks. At the same time agency, GSE portfolios and MBS hold the largest share of multifamily mortgages, with $392 billion, or 42% of the total.
State and local government entities reported a $1.8 billion, or 2.1% increase in multifamily mortgage debt, the second largest quarter-over-quarter increase. At $89 billion, state and local government entities hold 10% of the total.
Banks and thrifts hold $282 billion, or 30% of the total; commercial mortgage-backed securities, collateralized debt obligations and other multifamily mortgage debt asset-backed securities issues, $75 billion, or 8%; life insurance companies, $55 billion, or 6%; and nonfarm, noncorporate businesses, $15 billion, or 2%.
Commercial banks continue to hold the largest share of commercial/multifamily mortgages. Commercial banks saw the largest dollar increase, up $9.5 billion, or 3.5%, from the previous quarter — which brought the total to $930 billion, or 36% of the total commercial/multifamily mortgage debt outstanding.
Banks and thrifts saw the largest dollar increase in commercial/multifamily mortgage debt holdings in the second quarter, up $16.3 billion, or 1.8%. Comparatively, life insurance companies increased their holdings by $4.3 billion, or 1.3%, while real estate investment trusts marked a $2.3 billion, or 6.3% increase.
The volume of CMBS, CDO and other ABS (whose notes are held by the security issuers and trustees) shrank by $220 million, or 0.3%. Nonetheless, at $533 billion CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, at 21% of the total.
