Commercial mortgage maturity levels to fall this year

Commercial mortgage maturity levels will drop this year.

The level of mature mortgages in the commercial real estate market will fall significantly this year, which may provide relief for many property management companies.

In total, $119.5 billion in commercial and multifamily mortgage loans will become mature this year, which is eight percent of the entire outstanding balance, a report from the Mortgage Bankers Association explained. This is a decline of more than 20 percent from 2012, when the maturity figure was $150.6 billion.

“During the recession, and even in more recent years, approaching commercial and multifamily mortgage maturity volumes were referred to as akin to a ‘ticking time-bomb’ that would overwhelm the real estate finance markets,” said Jamie Woodwell, vice president of commercial real estate research for MBA.

Despite this, the levels should continue to fall in the next couple of years, as the maturation peak is in the past, Woodwell added.

Only 5 percent of all mortgages held by Ginnie Mae, the Federal Housing Administration, Freddie Mac and Fannie Mae will mature this year, the report said. This total is approximately $16 billion. There will still be more than $38 billion in mortgages maturation from loans held by credit card companies, which is 21 percent of the total.

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