Trepp Releases Life Insurance Commercial Mortgage Return Index: Mixed Economic Signals Shroud Q3 2021 Returns

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Trepp released the latest LifeComps™ returns report, revealing that commercial mortgage investments held by life insurance companies posted a modest total return of 0.63% in the third quarter of 2021.

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Trepp, a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets has released the third quarter 2021 returns report for its life insurance commercial mortgage index. Instantly download the report here: https://www.trepp.com/instantly-access-q3-2021-lifecomps-report.

Commercial mortgage investments held by life insurance companies posted a modest total return of 0.63% in the third quarter of 2021. The modest return is attributed to a decline in reported loan values of -0.37%.

"Economic growth expectations have been hindered as short-term inflation has become a long-term concern," said Jennifer Dimaano, Trepp Data Analyst. "The Fed remained dovish on inflation and maintained a “wait-and-see” attitude in the third quarter."

Treasury yields have been on a steady decline. In Q3, yields decreased by 22 basis points since hitting a high of 174 basis points in Q1. Interest rates remain low, and demand for goods continues to surge despite supply chain chokeholds.

Adding to supply chain woes, labor market shortages in Q3 created a demand for workers, especially in the hospitality space. The demand for labor for historically minimum wage jobs has increased to attract prospective candidates. Properties that would normally have hospitality workers saw the highest returns in the LifeComps portfolio in Q3.

Q3 quarter-over-quarter change in specific reserves increased 11% by a net of $13.2 million, resulting in a $130.8 million specific reserve balance while loan underwriting has eased.

Approximately 8,000 active loans are in the LifeComps Index, with an aggregate principal balance of $157 billion and valued at $166 billion. The weighted average duration is 5.23 years. To see the full report, click here: https://www.trepp.com/instantly-access-q3-2021-lifecomps-report.

For more information, contact Trepp at press@trepp.com or 212.754.1010. Visit http://www.Trepp.com for more information on LifeComps.

About LifeComps™
The LifeComps™ Commercial Mortgage Loan Index is the only published benchmark for the private commercial mortgage market based on actual mortgage loan cash flow and performance data which has been collected quarterly from participating life insurance companies since 1966. LifeComps provides a quantifiable investment performance index and serves as a benchmark for privately held commercial real estate mortgages.

About Trepp
Trepp, founded in 1979, is the leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT).

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Hayley Keen
@TreppWire
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