Despite ongoing challenges in new loan originations, commercial and multifamily mortgage debt levels in the U.S. continued to climb in the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report.
Total commercial and multifamily mortgage debt outstanding rose by $46.8 billion, or 1.0%, to reach a record $4.81 trillion by the end of Q1. Multifamily mortgage debt alone accounted for $19.9 billion of that growth, increasing 0.9% from the prior quarter to $2.16 trillion.
“Despite lower origination volumes, the overall level of commercial and multifamily mortgage debt rose in the first quarter of 2025,” said Reggie Booker, MBA’s Associate Vice President of Commercial Real Estate Research. “This increase reflects the extended duration of outstanding loans and the continued appetite for real estate investment across key investor groups.”
Major Players in Mortgage Debt Holdings
Four investor groups continue to dominate the commercial/multifamily mortgage market:
- Commercial banks and thrifts remain the largest holders, with $1.8 trillion in outstanding loans, or 38% of the market.
- Agency and GSE portfolios and MBS represent the second-largest share, holding $1.07 trillion (22%).
- Life insurance companies hold $752 billion (16%).
- CMBS, CDO, and other ABS issues account for $642 billion (13%).
The MBA noted that many life insurers, banks, and GSEs also invest in securities such as CMBS and CDOs, and their holdings are reflected accordingly.
Multifamily Mortgage Debt Snapshot
Focusing exclusively on the multifamily sector, the breakdown of Q1 2025 debt holdings is as follows:
- Agency and GSE portfolios and MBS: $1.07 trillion (50%)
- Banks and thrifts: $639 billion (30%)
- Life insurance companies: $242 billion (11%)
- State and local governments: $94 billion (4%)
- CMBS, CDO, and other ABS issues: $62 billion (3%)
Largest Increases in Q1 2025
In commercial/multifamily mortgage debt:
- CMBS, CDO, and other ABS issues posted the largest dollar gain, rising by $16.2 billion (2.6%).
- Banks and thrifts added $13.1 billion (0.7%).
- Agency and GSE portfolios and MBS increased holdings by $7.5 billion (0.7%).
- Life insurance companies grew their holdings by $6.1 billion (0.8%).
In percentage terms, REITs posted the strongest growth at 4.0%, while private pension funds saw the steepest decline, down 10.6%.
For multifamily-specific mortgage debt:
- Banks and thrifts led with a $10.0 billion increase (1.6%).
- Agency and GSE portfolios and MBS followed with a $7.5 billion gain (0.7%).
- Life insurance companies rose by $1.9 billion (0.8%).
REITs also led percentage growth in multifamily holdings, jumping 10.9%, while private pension funds registered a sharp 12.7% decline.
MBA’s report details holdings by investor type and asset structure, providing a comprehensive view of who owns what in today’s commercial and multifamily real estate debt markets.
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