LifeComps: Private Commercial Mortgage Returns Bounce Back

s on private commercial mortgages held by life insurance companies rebounded into positive territory in the first quarter after two consecutive quarters of negative returns, according to the LifeComps Commercial Mortgage Index. The first quarter's positive return of 1.63% followed returns of -3.16% in the fourth quarter and -2.08% in third quarter 2008. Of total return in the first quarter, 1.69% was income return and -0.05% was price return. The price loss was driven by higher Treasury yields, which slightly outweighed the positive effect from improved valuations. For the 12 months ending March 31, total return remained negative, with a -3.37% total return, compared to -4.14% last quarter. These are the only two quarters in LifeComps' history with negative annual total returns. Income return for first quarter was 6.57%, and price return was -9.94%. 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, the index shows. SOURCE: Li

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