The level of commercial/multifamily mortgage debt outstanding reached a record $2.83 trillion in Q4 of 2015, the highest figure since Mortgage Bankers Association (MBA) started tracking the data in 2007.
The year also saw the greatest annual growth on record, growing $184.5 billion, or 7 percent, since the end of 2014 (and $59.7 billion in Q4 alone).
But while the amount of commercial and multifamily mortgage debt held in agency and GSE portfolios and MBS, and on bank balance sheets, grew more than in any previous year on record, the amount of mortgage debt held in commercial mortgage backed securities (CMBS) continued to decline.
“While 2015 marked many new records, recent market and regulatory changes have the potential to impact the availability of commercial and multifamily mortgage debt during 2016,” said Jamie Woodwell, MBA’s VP of Commercial Real Estate Research, pointing specifically to the faltering CMBS market.
Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with $1.08 trillion, or 38 percent of the total. CMBS, CDO and other ABS issues are the second largest holders of commercial/multifamily mortgages, holding $515 billion, or 18 percent of the total; agency and GSE portfolios and MBS hold $461 billion, or 16 percent of the total; and life insurance companies hold $386 billion, or 14 percent.
When singled out, multifamily mortgage debt grew at the fastest pace since that series began in 1993, rising 3.4 percent to $1.06 trillion in Q4 from the previous quarter, and 10.4 percent from Q4 2014. Agency and GSE portfolios and MBS hold the largest share, with $461 billion, or 43 percent of the total; followed by banks and thrifts with $344 billion, or 32 percent; state and local governments with $91 billion, or 9 percent; CMBS, CDO and other ABS issues with $65 billion, or 6 percent; life insurance companies with $60 billion, or 6 percent; and the non-farm non-corporate business holds $13 billion, or one percent of the total.