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GMAC Staying in Commercial Mortgage Business

DETROIT-GMAC says it is shelving plans for a possible sale of its commercial mortgage business after record levels of business in 2003.

By Dan Heaton | Updated on December 02, 2003

DETROIT-General Motors Acceptance Corp. is staying in the commercial mortgage business. GMAC had said earlier this year that it was considering selling all or part of its commercial mortgage business, which operates as the wholly owned subsidiary GMAC Commercial Holding Corp.

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.”

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