Trepp Releases Life Insurance Commercial Mortgage Return Index, Reveals Office Returns Hit Hard in Q4 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 fourth quarter 2021 returns report for its life insurance commercial mortgage index. Instantly download the report here: https://www.trepp.com/instantly-access-q4-2021-lifecomps-report

The Trepp LifeComps portfolio posted a lower total return of 0.21% in the fourth quarter of 2021. This was a 66-basis point drop from the 0.62% return in the third quarter and 91 basis points down from second-quarter highs of 2.29%.

While the low returns hit all property types in the portfolio, office properties experienced the hardest hit with 0.054% in Q4 and a 2.29% annual return. With continued coronavirus fears in the second half of the year, many offices returned to remote work due to rising cases.

“The impact of the Fed’s decision to raise fund rates in the near-term on investor borrowing remains uncertain,” said Jennifer Dimaano, Trepp Data Analyst. “Future questions are imminent in the office sector with occupiers re-evaluating renewals as COVID cases ebb and flow and as the work-from-home culture becomes more norm. This presents a unique opportunity for office building owners to reimagine vacant spaces left by former tenants and transform how loans are underwritten.”

Ten-year Treasury yields have been on a steady decline since hitting a high of 174 basis points in Q1. Yields in the fourth quarter remained the same from Q3.

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. The LifeComps Commercial Mortgage Loan Index remains the only published benchmark for CRE mortgages based on actual performance data and cash flow collected from participating life insurance companies. Access our report to see the latest findings from this historic performance index.: https://www.trepp.com/instantly-access-q4-2021-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.

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