Top CRE Servicers Still Capitalizing on Scale

In the commercial mortgage servicing world, the biggest servicers are continuing to add servicing volume, and continuing to accrue economies of scale which strengthen their positions further. A midyear ranking of commercial mortgage servicers by the Mortgage Bankers Association reveals little change at the top compared to last year.

Also, almost all of the top-ranked servicers have added to their servicing portfolios. The rankings are based on the MBA's survey of large commercial mortgage-backed securities servicers - with at least $1 billion in named CMBS servicing volume - for the period ending June 30, 2004.

GMAC Commercial Holding was the No. 1 commercial mortgage servicer, in terms of total named servicing volume, with a $240.69 billion portfolio. The commercial mortgage behemoth had a holding of $172.28 billion at June 30, 2003 and has gained about 40% in servicing volume. The servicer acquired CapMark Services, which had a $75.59 billion portfolio last June, and thereby added to its holdings. (CapMark was ranked fourth in total named servicing volume last year.)

No. 2 on the list, Wachovia Securities, is well behind GMAC, with a $140.51 billion portfolio size. Wachovia has grown its portfolio about 45% from the previous period, when it held $96.07 billion in servicing volume.

Also on the list of top CMBS servicers by total named servicing volume - which includes the servicer's CMBS, life company and other commercial mortgage loans serviced - are Midland Loan Services, $102.43 billion (up 30% from $78.82 billion); Lennar Partners, $100.57 billion (n.a.); GEMSA Loan Services, $60.67 billion (a 5% gain from $57.04 billion); Wells Fargo Commercial Mortgage Servicing, $44.26 billion (a 25% increase from $35.2 billion); Bank of America, $44.22 billion (a 91% gain from $23.18 billion); Prudential Asset Resources, $43.51 billion (up 23% from $35.02 billion); ARCap Servicing, $42.61 billion (n.a.); and Washington Mutual Bank, $32.43 billion (up 13% from last year's $28.535 billion).

GMAC Commercial is also at the top of the list, with a $147.85 billion portfolio, when the rankings are based on total named CMBS servicing volume. The servicer has added on about 43% to its last year holding of $103.9 billion.

Lennar Partners is next with a $100.57 billion portfolio (the servicer's holdings as of June 30, 2003 are not available), followed by Wachovia Securities at $93.55 billion (up 33% from $70.86 billion).

Midland Loan Services, $78.78 billion (up 42% from $55.81 billion); ARCap Servicing, $39.51 billion (previous year's figures are not available); Wells Fargo Commercial Mortgage Servicing, $39.35 billion (a 30% gain from $30.03 billion); ORIX Capital Markets, $26.53 billion (a 16% decline from $31.29 billion); Bank of America, $23.04 billion (a 65% gain from its previous holding of $14.84 billion); KeyBank REC, $22.434 billion (a 32% gain from $17 billion); and GEMSA Loan Services with a CMBS servicing portfolio of $21.445 billion (up from $18.5 billion).

Between this year and last year, the list of CMBS servicers by total named CMBS servicing volume has mostly the same names. In one significant change, Lennar Partners, which did not figure in last year's ranking, is now at No. 2 (Lennar also did not find a place in last year's ranking of servicers by total named servicing volume.)

Also, ARCap Servicing, ranked fifth this year, did not find a place in last year's ranking of servicers by total named volume as well as by total CMBS volume. And ORIX Capital Markets is the only major servicer that has lost servicing volume between this June and last June.

And when it comes to rankings of CMBS special servicers, the same servicers are on the list of top 10 special servicers by volume, with one exception being GEMSA Loan Services, which is not on the list.

Also, Pacific Life has a mention in this list, at 10th place with a $1.87 billion special servicing portfolio.

Lennar Partners heads up the list, at $100.57 billion, followed by GMAC Commercial with $94.25 billion.

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