MBA: 13% of Commercial Mortgages to Mature in 2010
Of the $1.45trn in outstanding commercial mortgages, 13% will mature and become due in 2010, followed by 7% in 2011, according to a Mortgage Bankers Association (MBA) survey. The 2009 Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes said the $283.7bn in maturing loans over the next two years “is relatively low.” Surveyors collected information from servicers on the maturity years of more than $1.5trn in outstanding commercial mortgages, including the $1.45trn of non-bank holdings. According to the survey, 2%, or $4bn of commercial debt held or insured by Fannie Mae (FNM), Freddie Mac (FRE), the Federal Housing Administration (FHA) and Ginnie Mae will mature in 2010. Life insurance companies will have 7%, or $17.5bn, of holdings mature in 2010. For loans held in commercial mortgage-backed securities (CMBS), 12% will come due in 2010, including 7% of the $650bn of loans in fixed-rate conduit CMBS and 72% of the $54bn of loans in floating rate and large-borrower CMBS. Of the commercial mortgages held by credit companies and other investors, 32%, or $69bn will mature in 2010. "Commercial and multifamily mortgages tend to be long-term loans, often for ten years or more," said Jamie Woodwell, MBA vice president of commercial real estate research. "The fact that a disproportionate share of commercial and multifamily mortgages were made in 2005, 2006 and 2007 means that for most investor groups, only a fraction of the balance will be maturing in the next couple of years." Woodwell added that investor groups hold maturity schedules designed to match their liabilities. "Many maturing mortgages have built-in extension options, and most investor groups and servicers have considerable discretion in how they deal with loans that may not be able to immediately refinance at maturity,” Woodwell said. In an indication of tougher times ahead for commercial real estate, Foresight Analytics reports $770bn in commercial loans will be in negative equity between 2010 and 2014, and could require a write-down. Of those servicing the commercial and multifamily loans, Wells Fargo (WFC) and its recent acquisition Wachovia Bank hold $473.8bn in US primary servicing, the most of any servicer through 2009, according to a MBA survey of servicer rankings released Monday. PNC Real Estate and Midland Loan Services combined for $322.9bn, Berkadia Commercial Mortgage had the third-highest volume of $217.9bn. Write to Jon Prior. Disclosure: The author holds no relevant investments.