Sources of Capital in Commerical Property Markets
Capial in commerical property markets is provided by investors who are seeking investment returns rather than personal use of the properties. The types of areas that are common within this sector include individuals, pension funds, life insurance companies, commerical banks, and investment companies.
Life insurance companies are attracted to them because the assets are durable, long-lived, and provide an acceptabel expected rate of return. The way that they invest in commercial property types is by purchasing properties directly and also by providing mortgage funds to borrowers seeking to purchase properties.
http://nreionline.com/finance/news/life_insurance_storm_0705/
This site talks about the losses on real estate loans held by life insurance companies. The performance seems to have improved over time and explains how insurers have mitigated their troubled mortgages.
http://nreionline.com/finance/news/life_insurance_storm_0705/
This is an example of a significant provider for commercial properties and notes that it has been doing this for much of its entire history. This company has proved to have the ability to react to changing market conditions and keep up with its reputation over time.
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