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GMACCM Buys CapMark

GMAC Commercial Mortgage here - which is on the auction block - has agreed to purchase one of its top competitors, CapMark Services, Atlanta.

GMACCM is paying $106 million in a deal that includes not just CapMark, but affiliates involved in debt, asset and investment advisory services.

Even though GMACCM is being peddled to potential investors by its parent General Motors, the company has said publicly that it may not sell the commercial mortgage banker if it doesn't get its price.

Recently, sources told Mortgage Servicing News that GM's investment banker, Morgan Stanley & Co., picked about three finalists from a field of 12 to continue negotiating in regard to GMACCM.

One source familiar with the deal said it is unclear whether GMACCM will be sold as one unit or broken into pieces and sold to different investors.

A spokesman for GM declined to comment on the progress of GMACCM's sale.

For now, GMACCM is taking a business-as-usual approach, which means it will continue to fund commercial real estate projects and inquire about buying out competitors.

The parent of CapMark Services is Lend Lease Corp. of Australia.

According to the Quarterly Data Report, at year-end, GMACCM had $160.8 billion in commercial mortgage servicing rights, CapMark $66.1 billion. (The figures include subservicing contracts and master servicing.)

The two firms rank first and third, respectively, among commercial servicing firms. Once GMACCM swallows CapMark, it will have a market share of more than 16%.

Lend Lease's debt advisory group provides investment advisory services for commercial real estate investors. The group has $5 billion in managed accounts.

Lend Lease Asset Management is a specialty servicer with $21 billion in contracts.

When the sale was announced, Standard & Poor's revised its commercial mortgage servicer rankings on CapMark, Lend Lease Asset Management and GMACCM and put them all on "CreditWatch with negative implications."

S&P, commenting on its rating actions, said, "Given the magnitude of this acquisition, Standard & Poor's will be assessing the progress and efficacy of GMACCM's integration plan."

The rating agency added, "Whether or not this acquisition results in any change to GMACCM's servicer rankings, particularly with respect to its master and primary servicer rankings, will be determined significantly by how well GMACCM creates a combined organizational structure that retains and optimizes the appropriate existing personnel, reporting lines, systems and practices from each contributing operation to ensure the maintenance of quality and efficiency."

Barry Moore, a spokesman for GMACCM, told NMN that there is still "plenty of room for growth," even internationally, and that GMACCM, which has grown over the last 10 years through acquisitions and organizational growth, is open to more acquisitions.

Mr. Moore said that GMACCM will benefit from the economies-of-scale the acquisition brings, and new clients and relationships. Lend Lease's debt advisory business is expected to fit in with GMAC Institutional Advisors.

David E. Creamer, chairman of GMAC Commercial Holding Corp., GMACCM's parent, said, "The acquisition of the debt advisory platform is an excellent complement to our existing $6 billion investment management business, strengthens our existing relationships and adds several strategic institutional investors to our client base."

Mr. Moore said that it is too early to comment on what sort of personnel changes the acquisitions might bring.

GMACCM is targeting a 60-day transition period, said Mr. Moore.

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