Private commercial mortgages held by life insurance companies delivered a 4.01% total return in the third quarter of 2010, marking the sixth consecutive quarter of positive price performance and contributing to a 12-month total return of 16.03%, according to the LifeComps Commercial Mortgage Index. The index is a benchmark for the private commercial mortgage market based on actual cashflow data, which LifeComps has collected quarterly from participating life insurance companies since 1996.
The third-quarter gain followed total returns of 4.64% in the second quarter, 4.25% in the first quarter and 2.25% in the fourth quarter of 2009.
Of total return in the third quarter, 1.57% was income return, and 2.44% was price return. Over 12 months, income return was 6.62%, and price return was 9.40%. Falling treasury yields and tightening credit spreads contributed to improved loan market values over both time frames, LifeComps says.
Of the four major property types, apartments performed the best over 12 months, with a total return of 18.4% compared to 17.64% for retail, 14.73% for office and 14.01% for industrial.
SOURCE: LifeComps
