June 30, 2009
PRIVATE MORTGAGE
RETURNS REBOUND IN FIRST QUARTER 2009
Annual returns
negative for second consecutive quarter
BOSTON / June 30, 2009 – Returns on
private commercial mortgages held by life insurance companies
rebounded into positive territory in first quarter 2009 after two
consecutive quarters of negative returns, according to the LifeComps
Commercial Mortgage Index. First quarter’s positive return of 1.63
percent followed returns of -3.16 percent in fourth quarter and
-2.08 percent in third quarter 2008.
Of total return in the first
quarter, 1.69 percent was income return and -0.05 percent was price
return. The price loss was driven by higher treasury yields which
slightly outweighed the positive effect from improved valuations.
For the twelve months ended March 31
2009, total return remained negative with a -3.37 percent total
return compared to -4.14 percent last quarter. These are the only
two quarters in LifeComps’ history with negative annual total
returns. Income return for first quarter was 6.57 percent and price
return was -9.94 percent.
Apartments produced the highest
return in first quarter with a 3.49% total return followed by retail
at 1.25%, office at 1.23% and industrial at 0.85%. Over 12 months,
retail fared the best with a total return of -2.94% compared to
-3.10% for office, -3.25% for apartments and -3.51% 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 6,500 with
an aggregate principal balance of approximately $85.0 billion and
market value of $77.4 billion. The weighted average duration is 4.0
years, and average loan-to-value is 66.5 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, 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
