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WASHINGTON, DC-There was little question that life insurance companies would continue to invest in commercial real estate this year–for starters, it is not that easy for institutional investors to drastically reduce allocations on a dime. What was questionable however, was the LTVs and pricing that they would deliver and the deal size they would favor.

Usually life insurance companies have allocations and related terms set by the end of the year–2008 in this case. Last year, though, was an exception for obvious reasons and it took life insurers until the beginning of the year to get these decisions in place.

Some 40 days into 2009, it is clear they are still interested in DC deals: specifically, at LTVs that are around 60 to 65%, pricing at around 7% to 8% and in deal sizes that range from $50 million to $100 million, Cassidy & Pinkard Colliers’ John Campanella tells GlobeSt.com. “Life insurance companies are actively quoting deals but on lower leverage profiles.” Terms are between five and ten years, he says, and while some may go as high as $100 million, “deal amounts under $50 million are more appealing right now.” Also, he adds, while pricing is now in the 7% range, [Colliers] anticipates that will tighten.

At the end of December Campanella, along with colleague Jon Goldstein, arranged a non-recourse, fixed rate loan with a life insurance company on behalf of an affiliate of Guardian Realty Investors. The funding was out of the company’s 2008 allocation but Campanella says it is still indicative of the appetite insurers have for good DC deals with good sponsors. It was for 2200 Wilson Blvd., an 8-story, 96,909-square-foot office building that is 100% leased.

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