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Trepp Life Insurance Commercial Mortgage Return Index Stabilizes in Q3 as Credit Concerns Remain

·3 min read

Trepp released the latest LifeComps™ returns report, revealing that commercial mortgage investments held by life insurance companies posted a positive 1.71% total return in the third quarter of 2020, a decrease from the positive 4.58% return realized in the second quarter.

NEW YORK, Nov. 18, 2020 /PRNewswire-PRWeb/ -- Trepp, a leading provider of information analytics and technology to the structured finance, commercial real estate, and banking markets has released the third quarter 2020 returns for its life insurance commercial mortgage index showing a stabilization as credit concerns remain. Instantly download the report here: https://www.trepp.com/instantly-access-q3-2020-returns-report-life-insurance-commercial-mortgage-index.

Commercial mortgage investments held by life insurance companies posted a positive 1.71% total return in the third quarter of 2020, a decrease from the positive 4.58% return realized in the second quarter. Income contributed 1.00%, and appreciation added 0.71% in the third quarter.

"After two consecutive quarters with large swings in returns, the volatility in valuations caused by the pandemic appears to have receded," said Russell Hughes, head of data consortia initiatives at Trepp. "While interest rates remain near record lows, the persistence of credit concerns continues to dampen appreciation returns," Hughes said.

Credit concerns remain evident in Q3. The overall delinquency rate remained unchanged from Q2 at 0.06%. Lenders are continuing to grant deferrals and forbearance; in Q3, loans with an outstanding balance of $3.9 billion had $33 million in interest capitalized, this is a slight increase from Q2 where loans with an outstanding balance of $3.7 billion had $31 million in capitalized interest.

Of the four major property types, multifamily properties performed best over 12 months with a total return of 7.18%, followed by industrial at 6.48%, and office at 5.77%.

There are approximately 7,500 active loans in the LifeComps Index, with an aggregate principal balance of $149 billion. The weighted average duration is 5.29, and the average reported loan-to-value is 50%.

For more information and to see the full report, click here: https://www.trepp.com/instantly-access-q3-2020-returns-report-life-insurance-commercial-mortgage-index.

Contact Trepp at press@trepp.com or 212.754.1010 with any questions or visit https://www.trepp.com/lifecomps for more.

About LifeComps
The LifeComps™ Commercial Mortgage Loan Index is the only published benchmark for the private commercial mortgage market based on actual mortgage loan cash flow and performance data which has been collected quarterly from participating life insurance companies since 1966. LifeComps provides a quantifiable investment performance index and serves as a benchmark for privately held commercial real estate mortgages.

About Trepp
Trepp, founded in 1979, is the leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp is wholly-owned by Daily Mail and General Trust (DMGT). For more information, visit https://www.Trepp.com.

Media Contact

Hayley Keen, Trepp, 2127541010, press@trepp.com

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SOURCE Trepp