March 31, 2009
PRIVATE MORTGAGE
PERFORMANCE
DOWN 3.2% IN FOURTH QUARTER 2008
Annual total
return negative for first time in LifeComps 12 year history
BOSTON / March 31, 2009 – Returns on
private commercial mortgages held by life insurance companies dipped
farther into negative territory in fourth quarter 2008, posting a
-3.16 percent total return according to the LifeComps Commercial
Mortgage Index. Fourth quarter’s negative return was the largest in
LifeComps’ 12 year history and followed returns of -2.06 percent in
third quarter, 0.26 percent in second quarter and 0.82 percent in
first quarter.
Of total return in the fourth
quarter, 1.61 percent was income return and -4.77 percent was price
return. The price loss was driven by higher mortgage spreads and
lower valuations which overrode the positive effect from lower
treasury yields.
For the year, total return was -
4.14 percent which represents the first time the annual total return
was negative in LifeComps’ history. Income return was 6.45 percent
and price return was -10.59 percent.
Apartment returns were hit hardest
in fourth quarter with a -4.95 percent return followed by office at
-2.65%, retail at -2.39% and industrial at -2.21%. For the year,
apartment returns were -6.35% compared to -3.51% for retail, -3.21%
for office and -3.13% for industrial.
About LifeComps
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 6,600 with an
aggregate principal balance of approximately $85.6 billion and
market value of $78.1 billion. The weighted average duration is 4.2
years, and average loan-to-value is 59.8 percent.
Since its inception, the LifeComps
database has tracked individual cash flows on more than 11,500 loans
with principal balances totaling in excess of $155 billion. More
than 4,600 loans totaling $61 billion have been tracked from
origination to disposition.
Participating life insurers include
Allstate Life Insurance Company, CIGNA Investment Management, The
Equitable, John Hancock, Nationwide, Northwestern Mutual, Principal
Financial and Prudential Insurance Company of America. For more
information, visit
www.lifecomps.com.
CONTACTS:
For More Information on this Press Release
Northwestern
Mutual Media Relations, Northwestern Mutual
Phone: 800-323-7033
LifeComps Group
Michael Mannix, Director
Phone: 617-429-3047
