Agency and GSE portfolios and MBS saw their holdings of commercial/multifamily mortgage debt increase by $23 billion, or 2.8%.
GSEs led a first quarter rise in commercial/multifamily mortgage debt, according to the recently released Mortgage Bankers Association’s quarterly report.
While overall, commercial/multifamily mortgage debt rose 1.1% in the period, agency and GSE portfolios and MBS saw their holdings of commercial/multifamily mortgage debt nearly triple at that rate—an increase of $23 billion, or 2.8%.
In the first quarter, total commercial/multifamily loans rose $44.6 billion to $3.93 trillion.
Multifamily mortgage debt alone increased $28.8 billion (1.7%) to $1.7 trillion from the fourth quarter of 2020.
Eighty percent of that multifamily growth came from federally-backed agency and GSE mortgage-backed securities and portfolio. Multifamily accounted for about two-thirds of the combined sector growth.
Commercial banks continue to hold the largest share (38%) of commercial/multifamily mortgages at $1.5 trillion. Agency and GSE portfolios and MBS are the second largest holders of commercial/multifamily mortgages (22%) at $861 billion. Life insurance companies hold $588 billion (15%), and CMBS, CDO and other ABS issues hold $540 billion (14%).
The $28.8 billion increase in multifamily mortgage debt outstanding from the fourth quarter of 2020 represents a 1.7% increase. In dollar terms, agency and GSE portfolios and MBS saw the largest gain—$23 billion (2.8%)—in their holdings of multifamily mortgage debt. CMBS, CDO, and other ABS issues increased their holdings by $1.4 billion (2.8%), and commercial banks increased by $1.4 billion (0.3%). Private pension funds saw the largest decline in their holdings of multifamily mortgage debt, down $65 million (11.1%). Finance companies saw the largest decline in their holdings of multifamily mortgage debt, down $59 million (1.1%).
Looking forward, Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, said 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.
Already there have been signs that lenders have become more aggressive since the pandemic, Brian Stoffers, global president of debt and structured finance for capital markets at CBRE said. “They are hitting it full force this year. “The banks, especially the big money center banks, pulled back for three or four months. Now, they’re hitting it big.”