'Trophy' Buildings Hurt by Insurance Pullback.(Brief Article)

Although it is not clear at this stage if Congress is going to provide a federal backstop for the insurance industry to make terrorism insurance available for commercial real estate properties, a number of industry participants believe that only the financing of trophy properties is going to be significantly impacted by the non- availability of such insurance. For other properties, it is likely to be business as usual.

At a panel session "What's on the minds of chief investment officers?" at the MBA's commercial real estate finance convention, Dennis Francis, senior vice president, the Principal Financial Group, Des Moines, said that the Principal Financial Group is going to specifically exclude financing for "trophy properties," such as major highrises or owntown office buildings, since "terrorists are looking to go after properties of economic or sentimental value."

Stuart Reese, executive vice president and chief investment officer, Mass Mutual Financial Group, Springfield, Mass., also said that his company is "staying away from high profile properties."

Mr. Reese believes that Congress will "enact something" even though there is a delay.

Deborah McAneny, president, John Hancock Real Estate Finance, Boston, said that on Capitol Hill "somehow they think this is a bailout of the insurance industry" and this makes them wary because they have already been criticized for the ...