Commercial mortgage debt stock rises in first quarter as pandemic eases
There was a 1.1% increase in outstanding commercial and multi-family mortgage debt in the first quarter, but the majority came on the housing side of the equation, the Mortgage Bankers Association said.
Total commercial and multi-family debt stood at $ 3.33.3 trillion as at March 31, up $ 44.6 billion from the end of 2020. Multi-family debt ended the first quarter at $ 1.7 trillion, an increase of $ 28.8 billion or 1.7% from the previous three months.
March 31, 2020, just like the closures related to the pandemic that affected loan performance for leisure and retail properties started, there was $ 3.72 trillion in outstanding commercial and multi-family debt, with the multi-family segment responsible for $ 1.6 trillion.
“The growth in the era of the pandemic the amount of outstanding commercial and multi-family mortgage debt continued into the first quarter, but growth was not evenly distributed, âsaid Jamie Woodwell, vice president of commercial real estate research at the MBA, in a press release. sources increased their holdings of commercial and multi-family mortgages during the quarter, but nearly two-thirds of the overall growth came from multi-family properties, with 80% of that multi-family growth coming from federally-backed agencies and bank-backed securities. government-sponsored business mortgages and portfolios. “
At the end of the first quarter, banks held $ 1.49 trillion in commercial and multi-family mortgages, or 38% of total outstanding. This is a slight increase from $ 1.48 trillion (38%) as of December 31, 2020 and $ 1.4 trillion (39%) as of March 31, 2020.
But when it comes to outstanding multi-family debt alone, the agency / GSE investors hold the largest share, 50% to $ 861 billion. This total also makes it the second largest group of investors overall.
In the fourth quarter, the agency / GSE sector held $ 838 billion in multi-family debt, while at the end of the first quarter of 2020 they held $ 752 billion.
But GSE’s investments in multi-family mortgages going forward could be stifled by regulatory ceilings limit purchases of these loans.
Life insurers held $ 588 billion as of March 31, up from $ 587 billion in the fourth quarter and $ 572 billion in the first quarter of 2020. Meanwhile, securitizations held $ 540 billion in outstanding debt in the first. quarter, compared to $ 533 billion in the fourth quarter. and $ 516 billion a year ago.
Even with quarterly and annual growth and the reopening of the US economy, investors are likely to reassess the situation when it comes to providing new funding.
âAs the uncertainty surrounding the COVID-19 pandemic eases, lenders will have greater clarity on different properties and types of properties and will be in a better position to make new loans,â Woodwell said.