Extra life insurance coverage firm {dollars} flowing into CRE loans – Industrial Observer

Life insurance coverage corporations have been alive with industrial actual property lending over the previous yr and are poised for additional development.

Lively industrial actual property origination exercise was evident at established insurance coverage corporations PGIM, MetLife, and New York Life, whereas newer gamers, particularly KKR and Apollo, additionally joined the get together with the addition of {dollars}. of life corporations.

PGIM elevated its US debt origination to $17 billion in 2021 in comparison with $16.2 billion a yr earlier. Its portfolio of operations was various, comprising $7.4 billion inside its portfolio and core enterprise, $2.2 billion inside core-plus and excessive yield together with $7.3 billion of company debt.

One among PGIM’s notable offers concerned a $101 million floating-rate bridge financing to Asana Companions for the acquisition and leasing of a four-property, 168,206-square-foot retail and workplace portfolio in Chicago’s Fulton Market neighborhood. The deal demonstrated PGIM’s versatility in executing a core-plus transaction concentrating on larger returns.

MetLife Funding Administration additionally had an important 2021 with its industrial mortgage crew originating a file 235 transactions final yr totaling greater than $15.3 billion throughout conventional and various property sorts. These included life sciences, self-storage, and scholar housing. MetLife additionally launched a closed-end lodge debt fund.

Total, MetLife recorded $18.6 billion in new industrial actual property fairness and debt transactions and peaked at $109.8 billion in gross industrial actual property property below administration.

New York Life actual property buyers proved nimble in 2021 with $12.6 billion in transaction quantity of core, bridge, building and mezzanine debt. It surpassed pre-pandemic ranges in industrial actual property mortgages at $9.9 billion. Purchases of business mortgage-backed securities totaled $1.8 billion, with New York Life closing $923 million of fairness.

Seeking to broaden from its bridging lending roots, KKR added insurance coverage capital in February 2021 with the acquisition of life and annuity firm World Atlantic. The transfer arms KKR with extra bandwidth to underwrite longer-term fixed-rate and floating-rate loans, along with bridging debt.

The acquisition of World Atlantic paid early dividends for Manhattan-based KKR with the corporate quintupling its earlier lending file, set in 2019, with $14.5 billion in loans from 120 offers. The corporate expanded the scope of its loans with 60 new institutional debtors. About half of its transaction exercise final yr was devoted to the multifamily sector, whereas it additionally allotted a sizeable quantity to industrial offers.

The momentum of business actual property lending on the life insurance coverage degree was additionally evident at Apollo. The agency closed $14.1 billion in originations final yr with $8 billion of that whole derived from its insurance coverage service platform.

As Apollo and KKR additional develop their insurance coverage arms in 2022, the insurance coverage firm trade’s presence inside industrial actual property lending will solely broaden.

Spread the love

What do you think?