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Giliberto-Levy Monitor calls 2017 a banner year for commercial mortgage investments.

Byline: Staff Report

John B. Levy & Company published the Giliberto-Levy Monitor for the fourth quarter of 2017, revealing that commercial mortgage investments totaled their highest full-year return since 2014. The 0.36 percent total return for 4Q 2017 for private-market loans in investor portfolios was down from 3Q's 1.05 percent, but quarterly income return held steady at 1.0 percent. Meanwhile, capital value produced -0.72%, reflecting price returns of -0.70% and a -0.02% contribution from other factors. Despite the subdued performance for the quarter, 2017 was the first time in three years all four quarters posted positive total returns. The Giliberto-Levy Monitor reports on the quarterly results of the Giliberto-Levy Commercial Mortgage Performance Index (G-L 1), with comprehensive in-depth market analysis and commentary on key aspects of the commercial mortgage industry. The G-L 1 provides income, price, total returns and spreads for office, apartment, retail, industrial and other property after adjusting for credit loss. Other statistics highlighted in the G-L 1 include capitalization, duration, coupon rate, maturity and loan-to-values, and comparison of relevant returns and spreads to other debt classes such as investment grade and U.S. Treasury bonds. Also highlighted in the report is the recently launched Giliberto-Levy High Yield Real Estate Debt Index (G-L 2), a first-of-its-kind report that measures rates of returns from high-yield commercial real estate debt such as second mortgages, mezzanine loans and preferred equity. For the nine months ended September 30, 2017, the G-L 2 notched a return of 7.6 percent, which is slightly less than the percent return tallied since its inception at the beginning of 20. By contrast, the G-L 1 showed a return of 5.3 percent some 230 basis points less for the same time period. Giliberto-Levy Monitor subscribers also receive access to the Giliberto-Levy Analyzer a powerful custom query tool that enables users to analyze total return by property on a long-term historical basis, leveraging data collected over the past 35 years.

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Publication:The Mecklenburg Times (Charlotte, NC)
Date:Feb 27, 2018
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