🏦 Why Life Insurance Companies Are the Unsung Heroes of CRE Lending 💼

💰 Stable, Long-Term, and Low-Risk: Why CRE Investors Love Life Company Loans 🏢

🏦 Life Insurance Companies as CRE Lenders – Why Investors Love Them

When most investors think of commercial real estate (CRE) financing, they picture banks, CMBS lenders, or private debt funds. But behind the scenes, life insurance companies—or “life cos”—have quietly become some of the most stable, competitive, and investor-friendly lenders in the industry.

Let’s break down why savvy borrowers and mortgage brokers often seek them out first.

💼 What Are Life Insurance Company Loans?

Life insurance companies manage massive investment portfolios that must produce predictable, long-term returns to match future policyholder obligations.
To achieve this, they invest heavily in commercial real estate loans—favoring high-quality, low-risk properties with strong tenants and predictable cash flow.

These loans are typically:

·Conservative in leverage (50–65% LTV)

·Fixed-rate for 5–30 years

·Non-recourse, protecting borrowers’ personal assets

·Amortizing, reducing risk over time

In short: life cos act more like institutional bond investors than aggressive lenders, making them perfect partners for borrowers seeking rate stability and portfolio diversification.

📉 Why Borrowers Love Life Company Financing

1.Lower Interest Rates – Life companies often beat banks and debt funds on pricing for stabilized, income-producing assets.

2.Long-Term Fixed Rates – You can lock in rates for 10, 20, or even 30 years—ideal for core assets and generational holdings.

3.Non-Recourse Loans – You’re protected from personal liability if the property underperforms (as long as there’s no fraud or misrepresentation).

4.Flexible Prepayment Options – Many offer yield maintenance or step-down structures to accommodate sales or refis.

5.Stability & Certainty of Execution – Life companies are portfolio lenders, meaning they hold loans on their balance sheets. That translates to smooth closings and fewer surprises.

🏢 Ideal Property Types for Life Company Loans

Life insurance lenders typically favor Class A and strong Class B properties in major or secondary markets with proven stability.
Their sweet spots include:

·Office (well-leased or medical office buildings)

·Industrial (distribution or manufacturing facilities)

·Multifamily (core or stabilized suburban properties)

·Retail (grocery-anchored centers)

They generally avoid construction or transitional deals—but they’ll compete aggressively for stabilized, income-producing properties with strong fundamentals.

⚖️ When Life Co Loans Beat Other Options

Life insurance companies often win deals when:

·The investor wants low leverage and long-term stability.

·The property is core or core-plus with consistent occupancy.

·The borrower values relationship lending and non-recourse structure.

By contrast, banks and bridge lenders usually take the lead when the property needs renovation, lease-up, or repositioning.

💡 The Medallion Funds Advantage

At Medallion Funds, we work with hundreds of institutional capital sources, including life companies, pension funds, and credit unions.
Our role is to match each client’s investment goals and hold period with the right lender and structure—ensuring the best rate, leverage, and terms possible.

If you own or are acquiring a stabilized CRE asset, it’s worth exploring life insurance company financing. You might be surprised at how competitive it is.

🏁 Bottom Line

Life insurance companies may not advertise on every corner, but they’re a powerful and reliable source of CRE capital.
In uncertain rate environments, they offer what every investor craves: long-term stability, strong underwriting, and predictable performance.

If you’re considering your next acquisition or refinance, let Medallion Funds shop life co options for you.

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory