Commercial and Multifamily Mortgage Debt Outstanding Increased by $70 Billion in Third-Quarter 2022

Portfolio holdings of banks and other depositories were largely responsible for the increase.

$ in billions

Source: MBA

The level of commercial/multifamily mortgage debt outstanding increased by $70.0 billion (1.6 percent) in the third quarter of 2022, according to the Mortgage Bankers Association’s latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report released earlier this month.

Total commercial/multifamily mortgage debt outstanding rose to $4.45 trillion at the end of the third quarter. Multifamily mortgage debt alone increased $36.1 billion (1.9 percent) to $1.93 trillion from the second quarter of 2022.

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. 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.

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

The four largest investor groups are: banks and thrifts; federal agency and government sponsored enterprise portfolios and mortgage backed securities; life insurance companies; and commercial mortgage backed securities, collateralized debt obligation and other asset backed securities issues.

Commercial banks continue to hold the largest share (38 percent) of commercial/multifamily mortgages at $1.7 trillion. Agency and GSE portfolios and MBS are the second-largest holders of commercial/multifamily mortgages (21 percent) at $926 billion. Life insurance companies hold $655 billion (15 percent), and CMBS, CDO and other ABS issues hold $610 billion (14 percent). Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues. These loans appear in the report in the “CMBS, CDO and other ABS” category.

Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.

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