US Lenders Increase Appetite for Commercial Property

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Commercial and multifamily debt increased in the fourth quarter of 2012 by the largest amount since 2008, the Mortgage Bankers Association reported today.

The total level of debt was $29.7 billion higher than the end of 2011, an increase of 1.2 percent. Multifamily mortgage debt jumped to $846 billion, a 1.4 percent increase from the end of the third quarter and a 4.4 percent increase from the fourth quarter of 2011.

"The appetite among lenders and investors for commercial and multifamily mortgages grew during the fourth quarter," Jamie Woodwell, MBA's vice president of commercial real estate research. "Bank-held commercial mortgages increased by the largest amount since 2008."

In addition, the balances of loans held by life companies and held or guaranteed by Fannie Mae, Freddie Mac and FHA continued their multi-year increases. the association reported. Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $836 billion, or 35 percent of the total.
 
More from the report:

"Between December 2011 and December 2012, commercial banks and thrifts saw the largest increase in dollar terms in their holdings of commercial/multifamily mortgage debt - an increase of $42 billion, or 5.3 percent. CMBS, CDO and other ABS issues decreased their holdings of commercial/multifamily mortgages by $31 billion or 5.2 percent.
 
In percentage terms, the other (non life) insurance companies saw the biggest increase in their holdings of commercial/multifamily mortgages, an increase of 12 percent. Household sector saw the biggest decrease of 49 percent."

 
In percentage terms, the MBA found that private pension funds recorded the biggest increase in their holdings of multifamily mortgages, 32 percent, while finance companies saw the biggest decrease, 22 percent.
 
MBA's analysis is based on data from the Federal Reserve Board's Flow of Funds Account of the United States and the Federal Deposit Insurance Corporation's Quarterly Banking Profile.