Northwestern Mutual

Private Mortgages Returns Improve in Second Quarter 2009

Private commercial mortgages held by life insurance companies delivered a 2.25% total return in second quarter 2009, the best quarterly performance since fourth quarter 2007. Returns over the prior three quarters were 1.63% for first quarter 2009, -3.16% for fourth quarter and -2.08% for third quarter 2008 according to the LifeComps Commercial Mortgage Index.

Of total return in the second quarter, 1.68% was income return and 0.57% was price return - the first price gain since fourth quarter 2007. The positive price return resulted from improved valuations which outweighed the negative effect of higher treasury yields.

Despite second quarter performance, annual returns remained in negative territory for the third consecutive quarter with a -1.46% total return compared to -3.37% in first quarter and -4.14% in fourth quarter 2008. Income return for second quarter was 6.74% and price return was -8.20%.

Office properties fared best for the quarter with a 2.67% total return followed by apartments at 2.47%, industrial at 1.81%, and retail at 1.75%. Over 12 months, office returns were -0.75% compared to -1.44% for apartments, -1.50% for retail and -1.71% for industrial.

             Commercial Mortgage Loan
     Total Return by Property Type as of 6/30/09
                      Quarter  12 months
                      -------  ---------
    Apartment          2.47%     -1.44%
    Office             2.67%     -0.75%
    Retail             1.75%     -1.50%
    Industrial         1.81%     -1.71%
    ----------         ----      -----
    All*               2.25%     -1.46%
    ----               ----      -----
    *includes hotel, mixed use, and other commercial

  About LifeComps

The LifeComps Commercial Mortgage Index is the only published benchmark for the private commercial mortgage market based on actual cash flow and collateral performance data which has been collected quarterly from participating life insurance companies since 1996. Active loans in the LifeComps Index number 6,400 with an aggregate principal balance of approximately $85.0 billion and market value of $77.8 billion. The weighted average duration is 4.1 years and average loan-to-value is 69.4%.

Since its inception, the LifeComps database has tracked individual cash flows on more than 18,000 loans with principal balances totaling in excess of $221 billion. More than 3,800 loans totaling $54 billion have been tracked from origination to disposition.

Participating life insurers include Allstate Life Insurance Company, CIGNA Investment Management, The Equitable, John Hancock, Nationwide, Northwestern Mutual, Principal Financial and Prudential Insurance Company of America. For more information, visit

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SOURCE: LifeComps

CONTACT: Northwestern Mutual Media Relations, 1-800-323-7033,

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9/30/2009 10:32:00 AM