The amount of commercial-multifamily mortgage debt outstanding rose by $45.4 billion, 1.4 percent, in the third quarter of 2018 to an all-time high, according to the Mortgage Bankers Association.
Total commercial-multifamily debt outstanding rose to $3.32 trillion in the third quarter, surpassing the previous high of $3.27 trillion in this year’s second quarter. Multifamily mortgage debt increased $26.1 billion, 2 percent, to $1.3 trillion over the same period.

“Favorable commercial real estate fundamentals and strong lender demand pulled commercial and multifamily mortgage debt outstanding to a new high,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Multifamily mortgage debt continues to lead the pack--accounting for more than half of the total increase--and Fannie Mae, Freddie Mac and FHA remain the key drivers of multifamily mortgage growth. All four of the major lender groups added to the balance of loans they hold.”
The four major investor groups are: bank and thrift; federal agency and government sponsored enterprise portfolios and mortgage backed securities; life insurance companies; and commercial mortgage backed securities, collateralized debt obligation and other asset backed securities issues.

Commercial banks continue to hold the largest share, 40 percent, of commercial-multifamily mortgages at $1.3 trillion. Agency and GSE portfolios and MBS are the second largest holders of commercial-multifamily mortgages, 20 percent, at $648 billion. Life insurance companies hold $497 billion, 15 percent and CMBS, CDO and other ABS issues hold $458 billion, 14 percent. Many life insurance companies, banks and the GSEs purchase and hold CMBS, CDO and other ABS issues.

Multifamily Mortgage Debt Outstanding
Looking solely at multifamily mortgages, agency and GSE portfolios and MBS hold the largest share of total multifamily debt outstanding at $648 billion, 49 percent; followed by banks and thrifts with $426 billion, 32 percent; state and local governments with $88 billion, 7 percent; life insurance companies with $78 billion, 6 percent; and CMBS, CDO and other ABS issues holding $43 billion, or 3 percent. Nonfarm-noncorporate businesses hold $18 billion, or 1 percent.

Changes in Commercial-Multifamily Mortgage Debt Outstanding
In the third quarter, Agency and GSE portfolios and MBS saw the largest gains in dollar terms in their holdings of commercial/multifamily mortgage debt – an increase of $16.7 billion, or 2.6 percent. Life insurance companies increased their holdings by $11.3 billion, or 2.3 percent; agency and GSE portfolios and MBS increased their holdings by $10.5 billion, or 0.8 percent; and CMBS, CDO and other ABS issues increased their holdings by $5.1 billion, or 1.1 percent.

In percentage terms, REITs saw the largest increase–4.0 percent–in their holdings of commercial/multifamily mortgages. Conversely, state and local government retirement funds saw their holdings decrease 43.9 percent. This figure tends to be more volatile than others.

Changes in Multifamily Mortgage Debt Outstanding
The $26.1 billion increase in multifamily mortgage debt outstanding between the second and third quarter represents a 2.0 percent increase. In dollar terms, agency and GSE portfolios and MBS saw the largest gain, $16.7 billion, 2.6 percent, in their holdings of multifamily mortgage debt. Commercial banks increased their holdings by $7.1 billion, or 1.7 percent; and CMBS, CDO and other ABS issues increased by $2.6 billion, or 6.4 percent. State and local government saw the largest decline in their holdings of multifamily mortgage debt, down $2.0 billion, or 2.3 percent. In percentage terms, REITs recorded the largest increase in holdings of multifamily mortgages, at 12.7 percent, and state and local government retirement funds saw the biggest decrease at 43.8 percent.

Olympus Property has purchased Echo at Katy Ranch, a garden-style community built in 2013 and located near Houston. Olympus Katy Ranch, the new name of the property, is the twelve acquisition the organization made in 2018, adding around 4,000 apartments to the portfolio.

"Olympus Katy Ranch is located in a booming submarket of Houston and offers attractive long-term value and upside for our investors and our firm," said Chase Bennett, director of acquisitions at Olympus Property.

[caption id="attachment_8423" align="alignleft" width="300"] Olympus Katy Ranch is the twelve acquisition Olympus Property made in 2018.[/caption]

The neighborhood is known for its excellent school district, award-winning residential neighborhoods, and access to numerous major employers within the Energy Corridor. Located only 10 miles from Olympus Katy Ranch, the corridor is the headquarters for numerous national and international energy corporations, healthcare companies, engineering firms, chemical corporations, and financial services companies.

Also, the corridor is the third-largest employment center in Houston with more than 94,000 employees and 300 companies. The ranch offers a luxury, low-density community located on 14 acres. Premier amenities include a resort-style pool with spa, six gas grills, fireside lounge, resident clubroom with TVs, billiards room, 24-hour fitness center with circuit and core-training equipment, and a gated bark park.

 CIT Bank has unveiled a new community investment loan program that provides construction loans and permanent financing for multifamily affordable housing and community facilities across Southern California. CREA LLC, a real estate advisory firm, will support CIT with the affordable housing portion of the program.

"CIT is pleased to expand its community investment efforts in Southern California to ensure residents have access to affordable housing as well as essential community services such as health centers, schools and public safety centers," said Steve Solk, president of consumer banking for CIT. "This new program builds on our investments in affordable housing developments and low-income housing tax credits to serve our local community."

"CREA is proud to partner with CIT to help create high quality affordable housing across Southern California," said Gary Rodney, chairman of CREA.  "Together we will provide an outstanding debt and equity financing platform, streamlined process and competitive terms for local affordable housing developers."

Luxury Apartments on Tap for Melbourne, Fla.

Multiverse Global plans to begin construction of 600 luxury apartments at the Space Coast Town Center. Located in Melbourne, Fla., the apartments will be built in conjunction with JMG Realty and Integra Land Company, two experienced firms in the development and management of multifamily properties.

"These residences will be geared toward discretionary renters who choose the convenience and ease of living in Space Coast Town Center with its amenities, services, and restaurants, all in a walkable environment," said Edgar Jones, co-founder of Multiverse Global. "We anticipate that the community's architectural style, along with its gym, pool, and entertainment areas, will be comparable to the best of those found in Florida's major urban areas.