CRE Debt Cracks $3T Barrier
June 19, 2017 | by PAUL BUBNY | GlobeSt.com
WASHINGTON, DC—Anecdotally, the perception may be that lenders in the commercial mortgage arena are tightening the purse strings; however, the hard numbers suggest otherwise. Data issued last week by the Mortgage Bankers Association show that total commercial/multifamily debt outstanding rose to $3.01 trillion at the end of the first quarter, marking the first time it has broken the $3-trillion mark. Moreover, the level of outstanding commercial/multifamily mortgage debt rose by $37.6 billion during Q1, a 1.3% increase over Q4 2016.
How does this increase compare to what the industry has seen in the past couple of years? On both a percentage and dollar basis, Q1 2017 comes in behind Q1 2015, where the increase over the previous quarter was $40.4 billion, a gain of 1.5%. However, it outpaces the year-ago period, where the quarter-over-quarter increase was $35.3 billion above Q4 2015, a 1.2% increase.
“The amount of commercial and multifamily mortgage debt outstanding continued to grow during the first quarter,” says Jamie Woodwell, MBA’s VP of commercial real estate research. “Almost two-thirds of the growth came from increases in multifamily mortgage debt outstanding, and 80% of that growth came from portfolios and MBS held or guaranteed by federal government agencies and the GSEs.” Specifically, MBA data show that multifamily mortgage debt outstanding rose to $1.17 trillion, an increase of $23.4 billion, or 2.9%, from Q4 ’16.
The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.