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Hotels Boost Life Insurers' Q3 Commercial Mortgage Results: Trepp

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What You Need to Know

  • Multifamily mortgage investments produced the lowest returns.
  • Income held up well.
  • Gains in the latest quarter were lower than gains in the year-earlier quarter.

Yields on U.S. life insurers’ commercial mortgage investments increased a little in the third quarter, according to analysts at Trepp.

The easing of COVID restrictions on travel improved the performance of loans tied to hotels and other forms of lodging, and the lodging-related loans did better than the other types of loans that Trepp tracks.

Trepp had 7,991 loans on its life insurance commercial mortgage index tracking list in the third quarter, up from 7,568 a year earlier. The total loan balance increased to $157 billion, from $149 billion.

Trepp’s life insurance commercial mortgage performance index increased 0.63%. That compares with a 1.71% increase in the third quarter of 2020.

The amount of loan value appreciation included in the index fell 0.37%, but the value of the loans’ income increased 1%.

Trepp tracks five types of commercial mortgage loans. Here’s how those types of loans have performed over the past 12 months:

  • Lodging: Up 5.99%
  • Industrial: Up 4.05%
  • Retail: Up 3.62%
  • Office: Up 3.56%
  • Multifamily Residential: Up 2.81%

(Photo: John_T/Shutterstock)