In 2Q 2025, commercial and multifamily mortgage debt rose 1% to about $4.88 trillion, led by life insurance companies and REITs. Only three lender types saw quarter-over-quarter declines, but they collectively account for 3% of mortgage debt outstanding. Overall, the data suggests continued liquidity in CRE debt markets, characterized by attractive yields, conservative structures, and a robust pipeline of refinancing opportunities ahead.
The Mortgage Bankers Association released its 2Q25 Commercial/Multifamily Mortgage Debt Outstanding Report on September 23, 2025.
The level of commercial/multifamily mortgage debt outstanding increased by $47.1 billion (1%) in the second quarter of 2025, bringing the total debt outstanding to about $4.88 trillion. Within that, multifamily mortgage debt alone rose by $27.7 billion (1.3%) to $2.19 trillion from the first quarter of 2025. This implies that core commercial mortgage debt increased by $19.4 billion (0.7%) to approximately $2.69 trillion compared to the prior quarter. This is consistent with the Mortgage Bankers Association’s 2Q25 Survey of Commercial / Multifamily Mortgage Banker Originations, which previously showed that originations rose 48% quarter-over-quarter and 66% year-over-year.
Among the largest lenders, life insurance companies and REITs experienced the greatest quarter-over-quarter increases in total commercial/multifamily mortgage debt outstanding—up 2.4% and 2.2%, respectively. REITs had the largest increase in the prior quarter, underscoring the growing importance of debt funds in commercial real estate lending markets.
Only three lender types saw quarter-over-quarter declines:
However, it’s important to note that these lender categories represent relatively small portions of the total mortgage debt outstanding—just 2.4%, 0.7% and 0.1%, respectively.
Notably, banks and thrifts continue to increase their total outstanding mortgage debt holdings by 0.9%, now accounting for 37.5% of the total market. This trend is likely driven by large banks, as the Federal Reserve’s Senior Loan Officer Opinion Survey indicated that large banks reported stronger loan demand in the second quarter, while smaller banks experienced weaker demand.
The increase in outstanding CRE mortgage debt across both multifamily and core commercial underscores that debt capital markets remain liquid, supported by a broad mix of lenders. Looking ahead, we view CRE lending as not only resilient but also one of the most compelling opportunities across the four quadrants of real estate investing, with potential for attractive absolute, volatility-adjusted, and risk-adjusted returns. With higher rates and elevated maturities creating a favorable environment for lenders, and pricing still compelling relative to other risk assets, we believe now is the time to lean into CRE debt as a differentiated source of return.
For more analysis on the case for real estate debt, read: Steady returns, strong foundations: The case for commercial real estate debt.
Quarterly, by sector
Source: Mortgage Bankers Association, Federal Reserve, Trepp LLC, FDIC, Principal Asset Management. Data as of September 23, 2025.
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