Commercial Real Estate Debt Market Grows at Record Pace.

Washington -- Commercial mortgage debt outstanding rose 14.2% from the end of 2004, growing to $2.64 trillion at the end of 2005.

For the fourth quarter of 2005 alone, commercial and multifamily mortgage debt outstanding rose by $103 billion, or 4.1%, which is also a new record, the Mortgage Bankers Association reports based on data provided by the Federal Reserve.

Outstanding multifamily mortgage debt alone was at $674 billion at the end of 2005, representing a 10.2% increase for the year. And for the fourth quarter of 2005, multifamily debt outstanding was up $19 billion, or 2.9%.

"2005 was a strong year for commercial and multifamily real estate finance," noted Doug Duncan, the MBA's chief economist. "We saw record property sales, record mortgage origination levels and record levels of commercial/multifamily mortgage debt outstanding - all in an environment of strong loan performance and improving property fundamentals. With 2006 well underway, these trends show every sign of continuing."

Commercial banks hold $1.1 trillion of the commercial and multifamily mortgage debt outstanding, representing the largest share at 43% of the total (this also includes commercial loans that are backed by property pledged against loans to businesses, rather than by income-producing properties).

Commercial mortgage-backed securities pools hold $553 billion, or 21%, of the debt outstanding, followed by life insurance companies with $263 billion, or 10% of the total, and savings and loan institutions with $197 billion, or 8% of the ...