Hartford is slowing purchases of corporate bonds after the holdings rose 13% to $39.9 billion last year, McGreevey said. The firm is shying away from new loans on offices because prices may decline, he said. Industrial properties were subject to "a lot less overbuilding" than offices during the boom, McGreevey said.
"Industrial just never got as bubbly as office and hotel and it didn't crash as hard," Randy Binner, an analyst with FBR Capital Markets, said in an interview. "You can still be kind of cautious on commercial real estate and probably still capture better yield than you would in the corporate credit market."
Prices on investment-grade bonds rose to an average of 107.7 cents on the dollar at the end of 2010 from 90.8 cents two years earlier, according to Bank of America Merrill Lynch index data. The securities slipped to 106.7 cents on Feb. 18.
"There's been a ton of price improvement that has taken place so we're being very selective in the corporate bonds that we're purchasing overall," McGreevey said. "We're beginning to slow our purchase activity on the corporate side."