COMMERCIAL MORTGAGES POST 14.65% RETURN IN 2010
BOSTON / May 31, 2011 – Commercial mortgage investments held by
life insurance companies ended 2010 up 14.65%. Fourth quarter’s
total return of 1.04% followed gains of 4.01% in third quarter,
4.64% in second quarter, and 4.25% in first quarter, according to
the LifeComps Commercial Mortgage Index.
For the fourth quarter, income contributed 1.54% and price
contributed -0.50%. The price loss - the first experienced since
first quarter 2009 - was driven by higher treasury yields which
outweighed the positive effect from tighter spreads.
Of total return for the year, 6.48% was income and 8.17% was
price, with the value increase attributable to an overall tightening
of credit spreads and decline in treasury yields over the period.
Of the four major property types, apartments performed best over
twelve months with a total return of 17.02% compared to 15.85% for
retail, 13.92% for industrial and 12.30% for office.
|Commercial Mortgage Loan
Total Return by Property Type as of 12/31/10
*Inlcludes hotel, mixed use, and other commercial
The LifeComps Commercial Mortgage Index is the only published
benchmark for the private commercial mortgage market based on actual
cash flow data, which has been collected quarterly from
participating life insurance companies since 1996. Active loans in
the LifeComps Index number over 6,100 with an aggregate principal
balance of approximately $92.7 billion and market value of $95.2
billion. The weighted average duration is 3.89 years, and average
reported loan-to-value is 64 percent.
Since its inception, the LifeComps database has tracked individual cash flows on more than 18,000 loans with principal balances totaling in excess of $221 billion. More than 3,800 loans totaling $54 billion have been tracked from origination to disposition.
Participating life insurers include Allstate Life Insurance
Company, CIGNA Investment Management, AXA Equitable, John Hancock,
Nationwide, Northwestern Mutual, Principal Financial, Prudential
Insurance Company of America, and TIAA. For more information, visit www.lifecomps.com.
For More Information on this Press Release
Mutual Media Relations, Northwestern Mutual
Michael Mannix, Director