Wachovia Takes Top Spot in CRE Servicing
The list of the top commercial mortgage servicers at the end of 2005 show the same companies heading up the list, but the rankings from the Mortgage Bankers Association show that GMACCH has been edged out by Wachovia for the No. 1 spot.
Wachovia's total servicing volume, including primary and master servicing, was at $233.18 billion as of Dec. 31, 2005 while GMACCH, which has held the No. 1 spot for a few years now, was at $231.45 billion. No. 3 on the list is Midland Loan Services, at over $159 billion, followed by Wells Fargo, with $95.52 billion, and KeyBank REC, with $84.94 billion.
Leslie Fairbanks, Wachovia's Charlotte, N.C.-based head of real estate services, told Commercial Servicer that they mainly owe their gains to the strength of their origination platform, which originates loans of different types and had a very strong year in 2005. This strong origination performance rubbed off on the servicing side since they service the loans originated.
Ms. Fairbanks expects that as new products come out on the securitization side, Wachovia will get new servicing opportunities. Another prospect for growth is on the international side. Now that Wachovia's origination efforts are international, the servicing side is also looking to "support their efforts there."
Michael Lipson, executive vice president, GMACCH's global servicing group, also believes there is more scope for international growth. He sees growth in Asia and Europe as "unparalleled" and he expects that net growth has to come from those parts of the world, considering that the U.S. market is more mature and subject to a lot of amortization activity. In the U.S. market, consequently the avenues for growth are more limiting "unless you have major acquisitions of companies."
He said that his group is still growing and "those tables don't mean that much to me." For 2005, the group had a 10% growth rate, according to him, adding $21 billion to the portfolio, net of amortization. Mr. Lipson sees the market as consolidating and GMACCH plans to be one of the consolidators, actively buying in the originations market and growing internationally.
He doesn't believe that the pending sale of the unit, which is expected to close by the end of the first quarter, and the troubles at GMACCH's parent, General Motors, have had anything but a positive impact on the servicing operations.
However, another commercial servicer, a manager with a servicer ranked in the top 50 on the MBA list, who requested anonymity, sees it differently. According to this competitor, the impending sale situation means that people who might otherwise do business with GMACCH may not be inclined to at this point since stability is an important aspect of the servicing relationship. This source believes that GMAC "needs to develop a plan."
Also on the list of top 10 commercial servicers are Bank of America ($72.82 billion), GEMSA Loan Services ($67.34 billion), Prudential Asset Resources ($46.5 billion) Washington Mutual ($38.07 billion) and NorthMarq Capital ($29.31 billion).
All of the top 10 commercial servicers, with one exception, have seen their portfolios grow from midyear 2005. GEMSA Loan Services saw its portfolio decline from over $68 billion to over $67 billion. And KeyBank has grown its portfolio by acquiring ORIX Capital Market's commercial mortgage-backed securities servicing portfolio.
CMBS servicers did very well for 2005, in concert with the growth of the commercial mortgage securitization market, with the top CMBS master and primary servicers, ranked by volume, adding to their portfolios. Wachovia, the number one CMBS servicer, had a $154 billion portfolio as of December 2005 (over $132 billion as of June 2005). GMACCH, also ranked No. 2 in this niche, went from over $118 billion to over $129 billion. Mildland Loan Services grew its portfolio to over $104 billion, from over $84 billion for the previous period.
Wells Fargo went from over $52 billion to over $67 billion. And KeyBank REC grew its volume from over $27 billion to over $56 billion, aided by the acquisition of ORIX.
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