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Life Insurers' Commercial Mortgage Investments Did OK in Q3: Trepp

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Life insurers’ U.S. commercial mortgage investments produced positive returns in the third quarter, in spite of COVID-19-related challenges.

Life insurers’ commercial mortgage loans provided 1.71% in total return for the third quarter, according to analysts at Trepp.

That was down from a 2.2% increase in the third quarter of 2019, but it was up from a 1% decease in the first quarter of this year, according to Trepp data.


The third quarter ended Sept. 30.

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

Trepp analysts based the latest LifeComps report on records for 7,568 active commercial mortgage loans. That’s up from 7,532 active loans reflected in the LifeComps report for the third quarter of 2019.

The total mortgage loan balance increased to $149 billion at the end of the latest quarter, up from $146 billion a year earlier.

The average loan duration fell to 5.29% years, from an average of 5.43%.

In spite of worries about hotel and motel loans, lodging loans produced a 1.83% total return for the quarter.

Returns from other types of mortgage loans ranged from 0.41%, for retail, to 2.31%, for multifamily housing.

The delinquency rate held steady at 0.06%, but the charge-off rate for bad loans increased to 0.09, from 0.04%.

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