Has anyone done a insurance commercial real estate loan?

[Adam Philpot]

Has anyone done a commercial real estate loan through an insurance company? I’m just learning of this form of lending and found a company in my town. On its face, it looks like the rates are great, non-recourse, and could potentially could get a 20yr note. The only downside is early payoff penalties.

Am I missing anything? This feels like a great opportunity and wondering why you don’t hear about it more often.

Thanks

[Jessica Zolotorofe]

They're a little tough to deal with, but mostly fine as long as you don't need to make any changes, like if they have the right to veto a tenant or changes to a lease, it can be tough to get responses. The biggest issue is prepayment, like you said, Usually you can't at all during the first number of years or even half the term or more, and the second phase the defeasance costs are huge. They also usually have very high fees up front and they usually will only lend relatively been numbers.