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New CRE Loans Hit All-Time High

Loan Performance Improving, but Loan Maturities Coming Down the Pike
April 2, 2014
During the fourth quarter of 2013, commercial and multifamily mortgage originations were strong, boosting mortgage debt outstanding to a new all-time high.

In fact, the fourth quarter marked the highest volume of commercial and multifamily mortgage originations since 2007, with all investor groups increasing their activity, according to the Mortgage Bankers Association’s just-released 2013 Data Book.

The level of commercial/multifamily mortgage debt outstanding reached $41.2 billion, or 1.7%, over the previous quarter.


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Originations for commercial bank portfolios increased by 54% from last year’s fourth quarter. There was a 40% increase for life insurance companies, a 15% increase for CMBS and a 43% decrease in dollar volume of loans originated for the two big Government Sponsored Enterprises (Fannie Mae and Freddie Mac) loans.

Multifamily mortgage debt outstanding separate from CRE lending also rose to $895 billion, an increase of $11.5 billion, or 1.3%, from the third quarter and $36.6 billion, or 4.3%, from the fourth quarter of 2012.

Rising property incomes and values continue to boost the performance of commercial and multifamily mortgage loans, the MBA noted.

Commercial and multifamily mortgages performed relatively well during the downturn, and for most investor groups, delinquency rates are now back in the lower end of their historical range.

Loan Maturities Hit Nadir, but Expected to Increase Dramatically


Although 2014 will mark the fourth straight year of declining commercial/multifamily mortgage maturities, volumes are expected to spike - by 72% in 2015 and an additional 34% in 2016, as 10-year loans made in 2005, 2006 and 2007 begin to come due.

The loan maturities vary significantly by investor group. Just 3% ($12.7 billion) of the outstanding balance of multifamily and health care mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA and Ginnie Mae will mature in 2014.

Life insurance companies will see 5% ($18 billion) of their outstanding mortgage balances mature in 2014. Among loans held in CMBS, 7% ($41.8 billion) will come due in 2014. About 15% ($19.2 billion) of commercial mortgages held by credit companies and other investors will mature in 2014.

Top Lenders


Wells Fargo was the top commercial/multifamily mortgage originator in 2013, according to MBA. Other top originators include J.P. Morgan Chase, Bank of America Merrill Lynch, Eastdil Secured, KeyBank, PNC Real Estate, HFF LP, Meridian Capital Group, CBRE Capital Markets and Prudential Mortgage Capital Co.


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