Insurance Firms Favor Calif. for Real Estate Investments

California is the most popular place for real estate investments by U.S. insurance companies, a study by the American Council of Life Insurers showed Tuesday.

Of the $212 billion in commercial mortgages held by insurance companies, a major source of funding for real estate purchases, $35 billion were made on properties in California. Texas was second with $15 billion, followed by New York at $14 billion.

“Life insurance companies definitely believe they have found a haven for mortgages in the Golden State,” wrote Jack Nowakowski, manager of investment research at the ACLI. The study includes loans made as long ago as 1962, though 49% were made since 1998 and 80% since 1995.

The survey, which was done for the first time and doesn’t give historical comparisons, comes as losses on real estate are on the rise and occupancy, rents and property prices are slipping after a near-decade long boom. California, home to 107 of the 330 Internet companies that shut down this year, according to Webmergers.com, is taking the brunt of this slump.

The U.S. office vacancy rate rose to 10.8% in the second quarter, the highest in four years, paced by an almost 9 percentage point increase in the San Francisco metropolitan area, according to a study by Torto Wheaton Research. San Jose and Oakland saw similar jumps in vacancies.