Since then, however, the company says GMAC Commercial Holding has posted record operating results, with origination volume and earnings during the first nine months of 2003 already at or above the levels achieved during the full year of 2002. In addition, the company says, the overall capital markets environment has improved considerably from the difficult environment in 2002 and early 2003.
"Since our evaluation of a possible sale began, the commercial mortgage business has continued to perform extremely well," says GMAC chairman and president Eric A. Feldstein. "In addition, through our recent discussions with major industry participants we now believe that alternative large-scale funding mechanisms should be available without requiring a sale of the business. As a result, we will seek to establish alternative funding mechanisms to provide for the ongoing capital requirements of the commercial mortgage business while providing liquidity relief to GMAC."
On Oct.27, GlobeSt.com reported that Deutsche Bank AG was poised to buy the commercial mortgage business for approximately $1 billion. At that time, Jim Farmer, GMAC spokesman, acknowledged "We are in negotiations for the sale. ... It is an ongoing process and we cannot comment on the specifics at this time."
In March, when the potential sale was announced, the GMAC unit had a servicing portfolio in excess of $160 billion with room to grow. The rationale for selling it was to give that unit access to more capital than GMAC could provide and also obtain proceeds for GM's other businesses, which include insurance and auto and home loans.
GMAC Commercial Holding has more than 100 offices in nine countries servicing a portfolio of nearly $250 billion. For the nine months ended Sept. 30, GMAC Commercial Holding had origination volume of nearly $20 billion and earned net income of approximately $243 million, the company says, with total assets of approximately $14.6 billion.
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