Midwest Capital Funding Explains Metlife's Recent Massive Investment in Commercial Properties and Farming
Kansas City, MO (PRWEB) February 12, 2015 -- Taylor W. Grace, Managing Partner of Midwest Capital Funding, is confident that insurance giant MetLife is taking great strides in its recent decision to invest $12 billion dollars in commercial real estate financing and farming initiatives.
"Metlife, Inc., as well as other insurance companies, increased their investment allocation to commercial real estate loans due to the low-yield environment present in global bond markets," he said. "It is my belief that this was a good strategy and will likely continue on its present growth path."
Bloomberg Business (1/29/2015) reports that in 2014, MetLife invested an unprecedented $12 billion dollars in U.S. and foreign real estate -- a 5% increase from its 2013 investments. The insurance company also invested $1.7 billion in real estate equity.
MetLife made some of its investments in conjunction with other financial institutions, such as SunTrust Banks Inc. and Norway’s sovereign-wealth fund. The various projects it has invested in include the Copenhagen Airport, the San Antonio open-air mall, the Wells Fargo Center in Denver, and properties in Boston and Minnesota. MetLife has also invested in properties in the United Kingdom and Mexico.
In addition to real estate investments, MetLife has also devoted $11.9 billion into agricultural mortgages. Grace believes that given the rising values of agricultural real estate over the last decade, it is no wonder that MetLife devoted so much money into farming.
"Farm and pastureland in the U.S. has seen an unprecedented rise in value since 2003," he said. "Due to the rising prices, and a corresponding period of good profits in the farming and ranching sectors that have allowed overall debt ratios to stay relatively low, equity in agricultural land has grown substantially over the 2003-2014 period. All of this has allowed lenders to make well-secured loans that have a better risk-adjusted yield than the corporate bond market."
Grace remains confident that there will be many opportunities over the next few years for insurance companies to expand their investment in commercial mortgages.
"Moving forward into 2015 and beyond," he said, "it is our belief that there will be ample opportunities to continue to increase commercial real estate loans as a percentage of assets on insurance company's balance sheets. With what has been termed an 'avalanche of loan maturities' coming in 2015-2017, opportunities will be abundant."
About Midwest Capital Funding
Midwest Capital Funding is a full service commercial real estate finance firm. They can assist with acquisition loans, refinances, permanent loans, and construction loans. To learn more, visit http://midcapfunding.com
James McMinn, Leap Clixx, http://leapclixx.com, +1 (314) 641-1000, [email protected]
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