Commercial mortgage debt rises markedly to end 2012

Commercial real estate mortgage debt rose during the fourth quarter.

Property management companies witnessed the level of commercial real estate mortgage debt rise to levels not seen in four years during the final quarter of 2012.

Total mortgage debt during the fourth quarter rose $21.8 billion, which was 0.9 percent higher than the third quarter's level, a report from the Mortgage Bankers Association explained. When examining the figure compared to one year earlier, the figure rose more than 1.2 percent, or $29.7 billion.

Multifamily mortgages experienced a total debt level of $846 billion, which was nearly $12 billion higher than the third quarter, for a total 1.4 percent gain, the report noted. When looking at the figure's progress from the fourth quarter of 2011, it rose 4.4 percent for a total rise of $35.7 billion.

"The appetite among lenders and investors for commercial and multifamily mortgages grew during the fourth quarter," said Jamie Woodwell, vice president of commercial real estate research at MBA. "The fourth quarter saw the largest increase in commercial and multifamily mortgage debt outstanding since 2008.  Bank-held commercial mortgages increased by the largest amount since 2008."

Commercial banks had more than one-third of all commercial mortgages, which totaled approximately $835 billion, according to the report. The next highest holding percentage was for commercial mortgage-backed securities, asset-backed securities and collateralized debt obligations. This category had $561 billion, which was nearly one-quarter of all loans. The next category was government-sponsored entities and other agencies, which had 16 percent of loan debt, for a total of $376 billion.

CMBS delinquency rate continues decline
Commercial mortgage loan debt rose during the final quarter of the year, but the level of delinquencies for CMBS loans continued to fall as the year began.

Total CMBS loan delinquencies dropped to 9.42 percent in February, according to a report from Trepp. This was much lower than the all-time high figure of 10.34 percent, recorded in July. The total decline during that period was 92 basis points.

The most significant declination was in hotel loans, which fell to a rate of 10.08 percent, the report explained. This was nearly 170 basis points lower than the previous month.

Newly delinquent loans totaled $2.7 billion in February, which was lower than January's level, the report added. Total delinquencies of one month of more was less than $52 billion.

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