CLEVELAND—KeyBank Real Estate Capital has struck a pair of deals that would substantially increase the size of its commercial mortgage servicing portfolio. The locally based company has arranged to buy Bank of America N.A.'s $110.5-billion CMBS servicing portfolio, along with a CMBS special servicing portfolio of about $14 billion. Additionally, the firm entered into a long-term sub-servicing agreement with Berkadia Commercial Mortgage LLC to buy up its CMBS special servicing business.
If the deals go through, KeyBank will have a $205-billion servicing portfolio, becoming the third largest named servicer of commercial/multifamily loans in the US. On a pro forma basis, upon closing it will be named special servicer on approximately $47 billion of CMBS, making KeyBank the fifth largest CMBS special servicer.
“This acquisition helps to ensure that Key is well-positioned for growth and represents our willingness to invest in our corporate bank business,” chairman and CEO Beth E. Mooney said in a statement announcing the deal.
Marty O'Connor, executive vice president and head of KeyBank Real Estate Capital Loan Servicing and Asset Management, added, "Acquiring these portfolios allows us to further leverage our highly rated servicing platform. Our existing partnership with Berkadia will allow us to quickly integrate the Bank of America portfolios.”
KeyBank will purchase substantially all third-party CMBS and special servicing rights from BofA's Global Mortgages & Securitized Products business, which also includes servicing for a variety of private investors, subject to investor consent. Berkadia will act as sub-servicer on all CMBS primary servicing acquired from BofA.
“We're excited at the opportunity to expand our relationship with KeyBank,” said Mark McCool, Berkadia's executive vice president and head of servicing. “This agreement allows KeyBank to once again take advantage of our highly scalable and highly rated mortgage servicing platform.”
KeyBank Real Estate Capital holds the highest commercial servicer ratings from Morningstar Credit Ratings LLC and S&P as a CMBS master, primary and special servicer.
Further details of the transactions, including purchase price, were not disclosed. The firm expects the deals to close this quarter, subject to consents from certain investors, rating agencies and regulators. KeyBanc Capital Markets acted as financial advisor to Key in the acquisition.
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Sule Aygoren
Aygoren oversees the editorial direction and content for ALM’s Real Estate Media Group, including Real Estate Forum and GlobeSt.com. In her tenure with ALM, she’s held roles of increasing responsibility, including Managing Editor. Aygoren has received several awards for her coverage including Best Trade Magazine Report from the National Association of Real Estate Editors and the James D. Carper Award for Young Journalists. Under her direction, Forum has received four national NAREE awards for Best Commercial Real Estate Trade Magazine.
