METLIFE INVESTMENT MANAGEMENT EXCEEDS $91 BILLION IN GROSS MARKET VALUE OF COMMERCIAL REAL ESTATE ASSETS UNDER MANAGEMENT IN 2018
Gross market value of commercial mortgage loan and real estate equity assets under management climb to $91.2 billion, driven by strong activity throughout North and South American, European, and Asian markets.
WHIPPANY, N.J., March 28, 2019
MetLife Investment Management (MIM), MetLife, Inc.’s (NYSE: MET) institutional asset management business, today announced that it reached $91.2 billion in global gross market value of commercial real estate assets under management in 2018, a record for MIM. MIM’s real estate platform, which includes debt and equity origination and asset management capabilities across 11 regional offices, completed $15.1 billion in new debt and equity transactions in 2018.
“We are proud of what our platform has achieved across real estate equity and commercial mortgage investments over the last year, and we look forward to serving our clients and growing our third-party asset management business in 2019,” said Robert Merck, senior managing director and global head of real estate and agriculture for MetLife Investment Management.
MIM’s commercial mortgage team delivered another strong year, originating more than $12.9 billion in commercial mortgage loans in an increasingly competitive market. These loans continue to provide institutional investors with strong relative value over alternative fixed income investments. This origination activity increased the gross market value of commercial mortgage loan assets under management to $63.2 billion.
On the real estate equity side, MIM continued to selectively acquire assets in markets that enhance its expanding portfolio, while realizing the value of certain mid- to long-term investments with opportunistic sales through the year. In 2018, MIM committed to purchase 30 properties valued at more than $2.2 billion in gross market value, bringing gross market value of real estate equity assets under management to $28.0 billion. The company also extended its highly successful build-to-core track record, highlighted by the completion and subsequent full-property lease of Park Tower, San Francisco.
MIM also continued to expand its international real estate portfolio in 2018, significantly increasing gross market value of commercial real estate assets under management in several key global markets. Commercial mortgage production in the United Kingdom was $959 million in GBP debt. In Japan, MIM produced $560 million in Yen debt and real estate equity transactions. MIM also expanded its presence in Australia, originating 11 debt transactions for $630 million in AUD, and continued to grow its LatAm presence, increasing mortgage loan production in Mexico and Chile*.
Commercial Mortgage Loan Production
MIM originated a number of significant commercial mortgage loan transactions in 2018, including the following:
- Two Grand Central Tower (New York, NY) - $260 million office property first mortgage;
- Starwood Property Trust Inc. Warehouse Facility (multiple locations) - $250 million revolving line of credit;
- 1111 Third and Second & Spring (Seattle, WA) - $216 million office property first mortgage;
- Modera Avenir Place (Vienna, VA) - $156 million apartment and retail property first mortgage; and
- Roermond Designer Outlet Centre (Roermond, Netherlands) - $129 million retail center first mortgage.
Real Estate Equity Investments
MIM’s real estate equity portfolio includes investments in office, apartment, retail, industrial and hotel properties. Noteworthy transactions that closed in 2018, included:
- Southlands Town Center (Aurora, CO) – 1.7 million square foot lifestyle center;
- 249 Business Park (Houston, TX) – 820,000 square foot industrial facility;
- Hoffman Town Center (Alexandria, VA) – Mixed-use development consisting of more than 560 apartment units and ground level retail; and
- 89 A Street (Needham, MA) – 248,000 square foot office building.
About MetLife Investment Management
MetLife Investment Management, MetLife, Inc.’s institutional asset management business, is a global fixed income and real estate manager providing differentiated investment solutions to institutional investors worldwide. MetLife Investment Management provides institutional investors including corporate and government pension plans, insurance companies and other financial institutions with long-term public and private investment and financing solutions. MetLife Investment Management leverages a disciplined credit research and underwriting process to provide institutional investors with asset origination and acquisition opportunities and proprietary risk management analytics across public fixed income strategies, private placements, and commercial real estate debt and equity investing, among others. For more information, visit https://investments.metlife.com.
About MetLife
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.
Forward-Looking Statements
This news release may contain or refer to forward-looking statements. Forward-looking statements give expectations or forecasts of the future using terms such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other terms tied to future periods. Results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are based on assumptions and expectations. They involve risks and uncertainties, including the “Risk Factors” MetLife, Inc. describes in its U.S. Securities and Exchange Commission filings. The company has no obligation to correct or update any forward-looking statement. Parts of this news release may include additional information on forward-looking statements. This news release may also contain measures that are not calculated based on accounting principles generally accepted in the United States of America, or GAAP.
Explanatory Note on Non-GAAP Financial Information
Reconciliation of Commercial Mortgage Loans to GA Commercial Mortgage Loan AUM, Total Commercial Mortgage Loan AUM and Gross Commercial Mortgage Loan AUM; Real Estate and Real Estate Joint Ventures to GA Real Estate Equity AUM, Total Real Estate Equity AUM and Gross Real Estate Equity AUM; Reconciliation of Commercial Mortgage Loans and Real Estate and Real Estate Joint Ventures to Gross Commercial Real Estate AUM
| ($ in Billions) | 12/31/2018 | ||
| Commercial Mortgage Loans | $ 48.3 | ||
Plus: Fair Value Adjustment |
0.5 | ||
Plus: Reclassification |
0.7 | (1) | |
| General Account Commercial Mortgage Loan Assets Under Management | 49.5 | ||
Plus: Third Party Commercial Mortgage Loan Assets Under Management |
12.9 | ||
| Total Commercial Mortgage Loan Assets Under Management | 62.4 | ||
Plus: Gross Market Value Adjustment |
0.8 | (2) | |
| Gross Market Value Commercial Mortgage Loan Assets Under Management | A | $ 63.2 | |
| Real Estate and Real Estate Joint Ventures | $ 9.7 | ||
Plus: Fair Value Adjustment |
5.7 | ||
Plus: Reclassification |
(0.7) | (1) | |
| General Account Real Estate Equity Assets Under Management | 14.7 | ||
Plus: Third Party Real Estate Equity Assets Under Management |
6.7 | ||
| Total Real Estate Equity Assets Under Management | 21.4 | ||
Plus: Gross Market Value Adjustment |
6.6 | (3) | |
| Gross Market Value Real Estate Equity Assets Under Management | B | $ 28.0 | |
| Gross Market Value Commercial Real Estate Assets Under Management | A + B | $ 91.2 | (4) |
(1) Real Estate and Real Estate Joint Ventures at carrying value of $9.7 billion includes $731 million of joint venture investments, with the underlying investments primarily in commercial mortgage loans. Such joint venture investments have been reclassified to exclude from General Account Real Estate Equity Assets Under Management (and include in General Account Commercial Mortgage Loan Assets Under Management).
(2) Represents encumbering debt related to joint venture investments, with the underlying investments primarily in commercial mortgage loans. Adjustment converts Total Commercial Mortgage Loan Assets Under Management, at net asset value, to Gross Market Value Commercial Mortgage Loan Assets Under Management, at gross market value. See Note 1.
(3) Represents the encumbering debt. Adjustment converts Total Real Estate Equity Assets Under Management, at net asset value, to Gross Market Value Real Estate Equity Assets Under Management, at gross market value.
(4) Gross Market Value of Commercial Real Estate Assets Under Management is presented at gross market value (i.e., without a deduction for the amount of encumbering debt).
Gross Market Value of Commercial Real Estate Assets Under Management (“Gross Commercial Real Estate AUM”), Gross Market Value of Commercial Mortgage Loan Assets Under Management (“Gross Commercial Mortgage Loan AUM”) and Gross Market Value of Real Estate Equity Assets Under Management (“Gross Real Estate Equity AUM”) are financial measures based on methodologies other than GAAP. Gross Commercial Real Estate AUM are comprised of Gross Commercial Mortgage Loan AUM, plus Gross Real Estate Equity AUM (each, as defined below).
Gross Commercial Mortgage Loan AUM are comprised of Total Commercial Mortgage Loan Assets Under Management (“Total Commercial Mortgage Loan AUM”) plus an adjustment to state at gross market value. This adjustment is the amount of encumbering debt related to the joint venture investments included in Total Commercial Mortgage Loan AUM. See Note 2 to the reconciliation table.
Gross Real Estate Equity AUM are comprised of Total Real Estate Equity Assets Under Management (“Total Real Estate Equity AUM”) plus an adjustment to state at gross market value. This adjustment is the amount of encumbering debt related to Total Real Estate Equity AUM.
Total Commercial Mortgage Loan AUM are comprised of General Account Commercial Mortgage Loan Assets Under Management (“GA Commercial Mortgage Loan AUM”), plus Third Party Commercial Mortgage Loan Assets Under Management (“TP Commercial Mortgage Loan AUM”), which are stated at net asset value.
Total Real Estate Equity AUM are comprised of General Account Real Estate Equity Assets Under Management (“GA Real Estate AUM”), plus Third Party Real Estate Equity Assets Under Management (“TP Real Estate Equity AUM”), which are stated at net asset value.
GA Commercial Mortgage Loan AUM are comprised of commercial mortgage loans in MetLife’s general account portfolio which are actively managed and adjusted from carrying value to estimated fair value, and further adjusted to include the net asset value of the joint venture investments reclassified from Real Estate and Real Estate Joint Ventures. See Note 1 to the reconciliation table.
GA Real Estate Equity AUM are comprised of real estate and real estate joint ventures in MetLife’s general account portfolio which are actively managed and adjusted from carrying value to estimated fair value, and further adjusted to exclude the net asset value of the joint venture investments reclassified to GA Commercial Mortgage Loan AUM. See Note 1 to the reconciliation table.
TP Commercial Mortgage Loan AUM are comprised of non-proprietary commercial mortgage loans managed by MetLife on behalf of unaffiliated/third party clients, which are stated at estimated fair value. TP Commercial Mortgage Loan AUM are owned by such unaffiliated/third party clients; accordingly, TP Commercial Mortgage Loan AUM are not included in MetLife, Inc.’s consolidated financial statements.
TP Real Estate Equity AUM are comprised of non-proprietary real estate equity assets managed by MetLife on behalf of unaffiliated/third party clients, which are stated at estimated fair value. TP Real Estate Equity AUM are owned by such unaffiliated/third party clients; accordingly, TP Real Estate Equity AUM are not included in MetLife, Inc.’s consolidated financial statements.
MetLife believes that the use of Gross Commercial Real Estate AUM, Gross Commercial Mortgage Loan AUM, Gross Real Estate Equity AUM, Total Commercial Mortgage Loan AUM and Total Real Estate Equity AUM enhance the understanding of its real estate investment management services on behalf of its general account portfolio and unaffiliated/third party clients. MetLife believes that the use of GA Commercial Mortgage Loan AUM and GA Real Estate Equity AUM enhance the understanding and comparability of its general account investment portfolio.
Gross Commercial Mortgage Loan AUM, Total Commercial Mortgage Loan AUM and GA Commercial Mortgage Loan AUM are non-GAAP financial measures and should not be viewed as substitutes for Commercial Mortgage Loans, the most directly comparable GAAP measure. Reconciliations of Commercial Mortgage Loans to GA Commercial Mortgage Loan AUM, Total Commercial Mortgage Loan AUM and Gross Commercial Mortgage Loan AUM are set forth in the table above.
Gross Real Estate Equity AUM, Total Real Estate Equity AUM and GA Real Estate Equity AUM are non-GAAP financial measures and should not be viewed as substitutes for Real Estate and Real Estate Joint Ventures, the most directly comparable GAAP measure. Reconciliations of Real Estate and Real Estate Joint Ventures to GA Real Estate Equity AUM, Total Real Estate Equity AUM and Gross Real Estate Equity AUM are set forth in the table above.
Gross Commercial Real Estate AUM is a non-GAAP financial measure and should not be viewed as a substitute for the sum of Commercial Mortgage Loans and Real Estate and Real Estate Joint Ventures, the most directly comparable GAAP measures. Reconciliations of Commercial Mortgage Loans and Real Estate and Real Estate Joint Ventures to Gross Commercial Real Estate AUM are set forth in the table above.