When most of us think about life insurance companies, we think of purchasing a policy to plan for the future. However, thinking about what life companies do with our premiums will help you to understand why life insurance companies are an excellent source of capital financing for commercial real estate.
Life companies think in the long term: premiums are collected over a period of decades, and making stable, long-term investments is how life insurance companies ensure that funds are available when a benefit payout comes due. Most Life Companies today invest in excess of 30% of their multi-billion dollar portfolio of investments into Commercial Real Estate. Because of this long-term outlook, life companies are considered to be a “top grade” source of capital for the highly qualified, experienced investor-builder.
Life Companies offer numerous fixed rate products up to 25-years, have flexibility with loan structure and have been known to go beyond 75% leverage for the right asset with a strong guarantor. Life Insurance Real Estate loans are aggressively priced and are available for most asset classes including; industrial, office, hospitality and multifamily.
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