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PRIVATE MORTGAGE GAINS CONTINUE IN SECOND QUARTER 2010
BOSTON - September 30, 2010 – Commercial mortgages held by life insurance companies delivered a 4.64% total return in the second quarter of 2010, lifting the 12-month total return higher to 16.65% from 13.99% the previous quarter, according to the LifeComps Commercial Mortgage Index. Second quarter’s positive performance followed gains of 4.25% in first quarter, 2.25% in the fourth quarter 2009, and 4.57% in the third quarter 2009.
Of total return in the second quarter, 1.60% was income return and 3.04% was price return. The price gain resulted from lower treasury yields and improved loan valuations. Second quarter represents the fifth consecutive quarter of positive price performance. Over twelve months, income return was 6.74% and price return was 9.91%.
Of the four major property types, Retail performed best over the year with a total return of 18.58% compared to 18.19% for Apartments, 16.05% for Office and 15.05% for Industrial.
|Commercial Mortgage Loan
Total Return by Property Type as of 6/30/10
*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 5,9000 with an aggregate principal balance of approximately $80.2 billion and market value of $80.3 billion. The weighted average duration is 3.9 years, and average reported loan-to-value is 66 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.