Two deals announced this week will create a new No. 3 servicer of commercial real estate loans and substantially reduce the CRE servicing portfolio of a mega-bank.
The announcement came Thursday from KeyBank Real Estate Capital. The commercial mortgage lender operates as a subsidiary of KeyCorp.
Data previously released by the Mortgage Bankers Association indicates that the Cleveland-based company was the eighth-biggest commercial mortgage originator last year with 566 loans originated for $11.734 billion.
A separate MBA report said KeyBank serviced 10,935 commercial mortgages for $101.169 as of Dec. 31, 2012, making it the fifth-biggest CRE loan servicer in the country.
The servicing portfolio is about to expand to $205 billion based on a series of deals disclosed in yesterday’s announcement.
KeyBank said it reached an agreement to acquire mortgage servicing rights on $110.5 billion in CRE loans from Bank of America, N.A. The deal also includes a special servicing portfolio of around $14 billion in loans included in commercial mortgage-backed securities.
MBA’s data indicated that Bank of America Merrill Lynch’s total CRE loan servicing portfolio finished last year at 9,376 loans for $112.482 billion.
“KeyBank will purchase substantially all of the third party CMBS and special servicing rights from Bank of America’s global mortgages & securitized products business,” Thursday’s announcement stated. “This portfolio also includes servicing for a variety of private investors, subject to investor consent.”
The transaction, which won’t impact BofA’s CRE banking business, is projected to close in the second quarter.
After the MSR acquisitions, KeyBank said it “will be among the top three largest named servicers of commercial/multifamily loans in the U.S.”
A second long-term transaction announced has Berkadia Commercial Mortgage LLC sub-servicing all of the CMBS primary servicing acquired from BofA. The deal calls for KeyBank to acquire Berkadia’s CMBS special servicing business.
KeyBank servicing executive Marty O’Connor said in the news release that an existing partnership already in place with Berkadia will make the BofA portfolio integration swift.
The two deals are subject to the consent of investors, ratings agencies and regulators and leave KeyBank as the special servicer on around $47 billion in CMBS — making it the fifth-largest CMBS special servicer.
