Private commercial mortgages posted a 0.82% total return for first quarter 2008, according to actual cash flow and performance data collected from life insurer participants in the LifeComps Commercial Mortgage Index. The positive return followed a 3.11% gain in fourth quarter 2007.
Of total return in the first quarter, 1.58% was income return and -0.76% was price return. The negative price return resulted from credit issues which overrode declines in treasury yields during the quarter.
For the first time, LifeComps is reporting 10 years of actual data on private commercial whole loans. The property type yielding the highest total return is Office at 6.70% for 2007 and 7.49% over the past 10 years. Historic returns for all property types are as follows:
Commercial Mortgage Loan
Returns by Property Type as of 12/31/07
1 year 3 year 5 year 10 years
Apartment - Cash Yield 6.46% 6.93% 7.26% 7.78%
- Total Return 6.51% 5.22% 5.32% 7.36%
Office - Cash Yield 7.11% 7.38% 7.56% 7.97%
- Total Return 6.70% 5.38% 5.39% 7.49%
Retail - Cash Yield 6.66% 6.87% 7.32% 7.94%
- Total Return 6.35% 4.92% 5.19% 6.96%
Industrial - Cash Yield 6.57% 6.73% 7.02% 7.72%
- Total Return 6.62% 5.06% 5.19% 7.28%
Total - Cash Yield 6.78% 7.05% 7.33% 7.88%
- Total Return 6.57% 5.20% 5.29% 7.34%
The LifeComps Commercial Mortgage Index is the only published benchmark for the private commercial mortgage market based on actual cash flow data which has been collected quarterly from participating life insurance companies since 1996. Active loans in the LifeComps Index number over 6,700 with an aggregate principal balance of approximately $84.6 billion and market value of $85.0 billion. The weighted average duration is 4.55 years and average loan-to-value is 55.9%.
Since its inception, the LifeComps database has tracked individual cash flows on more than 11,500 loans with principal balances totaling in excess of $155 billion. More than 4,600 loans totaling $61 billion have been tracked from origination to disposition.
The LifeComps Index is published quarterly, 60 days after the end of each quarter in compliance with antitrust guidelines determined by counsel. LifeComps participants receive detailed quarterly reports that provide commercial mortgage performance statistics including total return, cash yield, default, and basis point loss for their portfolio versus the LifeComps total portfolio as well as attribution analysis showing performance contribution by property type, region, loan size and origination year. For more information, go to the LifeComps' website at http://www.lifecomps.com/.
First Call Analyst:
CONTACT: Moya Chew-Lai, +1-973-802-2617, firstname.lastname@example.org,
Web site: http://www.lifecomps.com/