CRE Debt Growing Fast.(Commercial and multifamily mortgage)

Washington -- Commercial and multifamily mortgage debt outstanding grew 2.4%, by $51.7 billion, to $2.2 trillion between the second and third quarters of 2004, the Mortgage Bankers Association reports.

Multifamily debt alone grew by $8.2 billion, 1.4%, to $582 billion, according to the MBA, which is basing its report on Federal Reserve Board data.

The total outstanding commercial and multifamily debt, which now exceeds $2.2 trillion, represents a "record high" according to Doug Duncan, chief economist and senior vice president, MBA.

He noted, "Last quarter the growth was powered almost entirely by the commercial bank and CMBS sectors, which pumped an additional $44 billion into the market. With interest rates still relatively low and investment property sales remaining active, 2005 is likely to continue to see strong flows of capital into the commercial and multifamily mortgage debt markets."

The largest share of the commercial and multifamily mortgages, $951 billion - which represents 43% of the total - is continued to be held by commercial banks.

However, banks also report "commercial and industrial" loans in the commercial mortgage category, according to the MBA.

Commercial mortgage-backed securities pools are the second-largest holders of commercial and multifamily mortgages, holding $401 billion, or 18% of the total.