The all-in cost of the loan is fixed at 5.05% for 10-years and has been arranged at a loan to value of 60%.
L&G first looked at the idea of commercial property lending a year ago but withdrew amid worsening market conditions.
It is understood L&G held negotiations with 150 prospective borrowers before agreeing with Unite.
It is now looking to make another property loan in the coming weeks.
Ashley Goldblatt, head of commercial lending at L&G Investment Management, said: “Having looked at the market in depth over the last year and with an experienced team in place this first, sizeable, complex transaction answered our objectives in developing this area of our business.
“Unite represents a market leader with a strong track record operating in a resilient but non-traditional sector of the real estate market.
“We have proven ourselves capable of taking a more flexible approach to lending - as is seen in the ten year loan term.”
Goldblatt added that traditionally insurance companies restricted themselves to long term loans of 15 to 20 years or more that matched their long dated liabilities whereas those banks that were still willing or able to lend were only prepared to do so on short terms.
Goldblatt said: “This is a space that we feel comfortable in filling.”
The property lending business will be entirely financed by policyholders’ funds.
The loan to Unite has been secured against a portfolio of student dormitories in London, Manchester and Bristol and is below the 5.7% average Unite pays for its debt.
Joe Lister, chief financial officer, said securing the loan was a testament to the strength of the company and marked an important step for the group.
Two of L&G’s UK rivals, Aviva and Prudential, are already lending on property.
