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CRE Mortgage Debt Spikes Despite Fewer Originations

Difficult refinancings and delayed payoffs led to a rise in outstanding US commercial and multifamily debt in Q1 despite fewer new originations.

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Good morning. Despite slow originations, commercial and multifamily mortgage debt was up nationwide in May due to slower payoffs.

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DEBT outstanding

Commercial Mortgage Debt Spikes Due to Slow Loan Payoffs

The shares of multifamily mortgage debt held by various classes of suppliers.

Difficult refinancings and delayed payoffs led to a rise in outstanding US commercial and multifamily debt in Q1 despite fewer new originations.

By the numbers: According to the Mortgage Bankers Association (MBA), total CRE mortgage debt shot up $40.1B in 1Q24, reaching $4.7T. This rise occurred even as new loan originations slowed down, largely due to fewer property sales and refinancings leading to fewer loan payoffs.

By lender: In Q1, banks saw the biggest spike in commercial/multifamily mortgage holdings, adding $12.8B. CMBS issuers followed with $11B, while agencies/GSEs and life insurer holdings grew by $10.2B and $7B. CMBS, CDO, and other ABS issues saw holdings rise by 1.9%. Meanwhile, state and local retirement fund holdings shrank by 8.3%. 

Multifamily debt: The MBA reported that multifamily mortgage debt rose by $23.74 billion in Q1, surpassing the $14.78 billion increase in Q4. Total multifamily debt reached $2.099 trillion, up $98.3 billion (4.9%) year-over-year. Overall commercial mortgage debt, including multifamily, grew 0.9% from Q4 2023 to $4.698 trillion, with multifamily debt accounting for 44.7% of the total.

This chart shows each lender class's current share of multifamily mortgage debt alongside their share of net new mortgage debt in Q4.


Who’s growing? The chart above shows that while GSEs were the largest contributor to multifamily mortgage lending growth, banks were close behind, achieving 89% of the GSEs' increase. Life insurers saw faster growth in their holdings, but this was revised down last quarter. The other top 6 lenders contributed less to the growth in multifamily debt. What does that mean? These lenders are continuing to become relatively less important as sources of funds.


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✍️ Editor’s Picks

  • Builder blues: Builder sentiment in single-family homes hit a 7-month low in June, with NAHB's Housing Market Index dropping to 43.

  • Homebuilding boom: Lennar Corp. (LEN), the largest US homebuilder, saw orders jump 20% to 21.3 K, and revenue rose 10% to $8.8B.

  • Debt dilemma: A recent Moody's report highlights higher default risks in CMBS due to $27B in subordinate debt from 2014 to 2023.

  • Criminal empire: George Norcross, a Democratic kingmaker in NJ, was charged with racketeering, along with 5 other crimes, and faces 10–20 years in prison if convicted.

  • Mounting mortgages: Financial markets may soon have no choice but to absorb $2T in CRE debt maturities, including $679B in potentially troubled debt.


  • Washed away: A new developer hopes to revive a stalled SF apartment project on a shuttered car wash site with a larger housing proposal.

  • Sky-high luxury: Oak Row Equities paid $38.5M for a 49 NW 5th St. site to develop First & Fifth, a 500-unit, 45-story luxury community in Miami.

  • Texas triumph: Viking Capital acquires Villas at Sundance for $38M with $24.2M in Black Oak Capital financing, and is preparing for $2.3M in exterior and $5K/unit in interior upgrades.

  • Atlanta acquisition: Scion JV, with Brookfield Asset Management, acquires Atlanta's Reflection, a 741-bed student housing community, assuming an $87.3M loan and a $65M note.

  • New ownership: CBRE just facilitated the sale of Landing at Fiesta Village, a 220-unit Mesa luxury complex sold by Rockpoint to Millburn & Co.

🏭 Industrial

  • Bright ideas: Solar installations on warehouse rooftops are facing cost concerns despite growth. These properties currently make up 5% of the Prologis (PLD) portfolio.

  • Branching out: A California REIT buys Crossroads Distribution Center warehouses, while a Newport Beach company acquires 100 acres in Jacksonville.

  • Good deal: Stream Realty Partners bought a fully leased  104KSF industrial facility in Chicago for $19M.


  • Shopping center coup: Kobalt Investment Co. bought a majority share in the 222.3KSF Rio Norte Shopping Center in Laredo, TX, with diverse retailers.

  • Elizabeth’s future: Centrum Realty & Sorelle Capital are set to begin construction on a mixed-use multifamily and retail development in Elizabeth, NJ.

  • Downtown dreams: A new program lowers the retail space threshold in downtown Austin, making downtown shops more accessible to small businesses.


  • Building a Citadel: Billionaire Ken Griffin expands Citadel and Securities at 830 Brickell by leasing two more floors, with plans to build a $1B HQ tower in Miami.

  • Foreclosure fumbles: One Dallas investor's first office-to-residential project, The Bell in Cleveland, is facing foreclosure after its $21M purchase in 2022.

  • Setting sail: MSC Group acquired a $67M commercial condo in Miami for its North American cruise division headquarters.

  • Emerald City surge: Seattle's office sector saw 2.5MSF delivered in the first 4 months of 2024, significantly more than during the same period in 2023.


  • Coasting on Coconut Grove: short-term rental company Miami Vacation Rentals purchased 19 condo-hotel units, a commercial space, and most of the common areas at Hotel Arya.



Currently, office landlords prefer five types of companies: financial services firms, law firms, consulting firms, tech startups, and media companies. Unsurprisingly, they charge financial services firms the most (~$90PSF on average). Law firms typically sign the longest leases (95–100 months), while tech companies have commitment issues (60–65 months).

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