The Union Labor Life Insurance Company's Real Estate Interest Group (REIG) had another strong performance last year. Ullico's reputation for conservative yet flexible underwriting, deal structuring and execution are well known throughout the industry, enabling REIG to actively seek prudent investment opportunities that benefited investors and union labor.
In 2016, Ullico provided $581.9 million of project financing. It provided $230 million of that total as a sole lender and the other $351.9 million in participating loans. REIG's total loan financing currently comes to over $2.5 billion in permanent loans ($93.6 million) and construction loan projects ($488.3 million) throughout the United States.
Since 2012, Ullico has provided 83 loans for approximately $3.3 billion while participating in total loan financings in excess of $8.8 billion.
Calendar year 2016 stood out as a significant year for Ullico's construction lending program, given that its ongoing lending activity resulted in measurable economic impact to workers and communities where the projects take place.
Projections indicate that new construction financed in 2016 will produce in excess of 8,600 full time jobs, 17.2 million working hours and $1.0 billion of personal income for union workers. For instance, in New York City, Ullico's $75 million investment in a $1.5 billion participation loan for a to-be-constructed 58-story, Class-A, 1.7 million square foot trophy office building located between Madison and Vanderbilt Avenues in Midtown's Grand Central submarket helped ensure that the project be constructed using 100 percent union labor. Estimates for this project indicate it will generate in excess of 4,640 full time jobs, 9.2 million working hours and $687 million of personal income for union workers.
Ullico also financed more than $93 million in permanent loans last year. Some of those permanent loan projects included the refinancing of a 957,000 square foot regional mall in Redondo Beach, Ca. and a 10-story, 81 unit loft apartment building in Miami.
Note: Separate Accounts J is offered through a group annuity contract issued by The Union Labor Life Insurance Company (Union Labor Life) and is sold through Ullico Investment Company, Inc. (Member FINRA/SIPC), both subsidiaries of Ullico Inc. The Accounts will only be offered to qualified institutional and accredited investors.
Investments in commercial mortgage loans secured by illiquid real estate are subject to additional risks including the potential inability of an investor to redeem units. The investment return and principal value of the Fund will fluctuate so that an investor’s units, when redeemed, may be worth more or less than original cost. In addition, fluctuations in interest rates and market volatility may limit available financing for real estate investments held by the Fund, thereby adversely affecting the value of the underlying investments, the investment return and the liquidity of the investments. Furthermore, the loan values determined by Union Labor Life could vary significantly from the prices at which the investments would sell because market prices can only be determined by negotiation between a willing buyer and seller. The ability of borrowers to repay loans issued by the Fund will typically depend upon the successful construction or operation of the related real estate project and the availability of financing. The repayment of loans issued for the construction of multifamily housing (i.e condominium loans) will generally depend on the borrower’s ability to sell the underlying housing units. There is no guaranteed that Union Labor Life will attain its investment objectives. Potential investors in the Fund should carefully read the Fund Disclosure Memorandum for a description of the potential risks associated with investment in the Fund.
This document and the information provided is confidential. Direct union impact figures provided by a 2014 economic impact study performed by Pinnacle Economics through input-output analysis utilizing IMPLAN modeling software. The study was performed using estimated project costs and union prevailing wage data from state departments of labor as provided by Ullico Investment Advisors, Inc. Jobs, Hours of Work and FTE figures reflect totals over the life of the project. All construction impacts are temporary in nature, and unfold as construction spending unfolds. This is an illustration of the projected economic impact of selected commercial real estate projects. All projections assume the completion of the relevant construction project which can depend on several factors including borrowers meeting all lending obligations. Projections are based on overall project costs which include the participation of Separate Account J. Separate Account J is offered through a group annuity contract issued by The Union Labor Life Insurance Company. The group annuity contracts are marketed and sold through Ullico Investment Company, Inc. (Member FINRA/SIPC) to qualified institutional investors. Separate Account J will only be sold to US pension and profit-sharing plans that meet the qualifications of Section 401 of the Internal Revenue Code of 1986 (IRC), annuity plans which meet the requirements for the deduction of the employers’ contribution under IRC section 402(a)(2), or subject to certain conditions, governmental plans as defined in the IRC Section 414(d). Investment in illiquid real estate and commercial mortgage loans are subject to additional risks including the potential inability of an investor to redeem units. In addition, fluctuations in interest rates and market volatility may limit available financing for real estate investments thereby adversely affecting the value of the underlying investments, the investment return and the liquidity of the Account.