Life Insurers' Commercial Mortgage Investments Did Great in Q2: Trepp

Life insurers' U.S. commercial mortgage investments did well in the second quarter, in spite of COVID-19 and pandemic-related lockdowns.

Life insurers' commercial mortgage loans provided 4.58% in total return for the second quarter.

That was up from a 1% drop in the first quarter, and up from 3.11% in total return for the second quarter of 2019, according to analysts at Trepp.

Resources

A copy of the new Trepp report is available here.
An earlier article about Trepp data is available here.

The second quarter ended June 30.

Trepp, a financial services and real estate data firm, published life insurer commercial mortgage investment performance figures in a new LifeComps report.

Trepp analysts base the LifeComps reports on records for 7,601 active commercial mortgage loans.

The total mortgage loan balance increased to $148 billion at the end of the latest quarter, from $145 billion a year earlier.

The average loan duration fell to 5.37% years, from an average of 5.46%.

In spite of worries about hotel and motel loans, lodging loans produced a 0.35% total return.

Multifamily housing loans produced the strongest performance, with a 5.39% total return.

"Delinquencies and charge-offs remain very low, especially given the current market conditions," the analysts write.

Delinquencies affected only 0.06% of life insurers' commercial mortgage loan investments, the analysts write.

Delinquencies may be low partly because, even when life insurers have invested in the kinds of properties that could be affected by the COVID-19 pandemic, those properties often have characteristics that make them especially resistant to downturns, the analysts write.

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