Private Mortgage Gains Continue in Q2 of 2010

Commercial mortgages held by life insurance companies delivered a 4.64 percent total return in the second quarter of 2010, lifting the 12-month total return higher to 16.65 percent from 13.99 percent the previous quarter, according to the LifeComps Commercial Mortgage Index. Second quarter’s positive performance followed gains of 4.25 percent in first quarter, 2.25 percent in the fourth quarter 2009, and 4.57 percent in the third quarter 2009. Of total return in the second quarter, 1.60 percent was income return and 3.04 percent was price return. The price gain resulted from lower treasury yields and improved loan valuations. Second quarter represents the fifth consecutive quarter of positive price performance. Over twelve months, income return was 6.74 percent and price return was 9.91 percent. Of the four major property types, Retail performed best over the year with a total return of 18.58 percent compared to 18.19 percent for apartments, 16.05 percent for office and 15.05 percent for industrial. For more information, visit www.lifecomps.com.