Consolidation Extends to CRE Servicing.

Two commercial mortgage servicers are exiting the ranks of major servicers as a result of being acquired, in a sign that acquisitions in the sector are still going strong. In one deal, Wells Fargo is acquiring Reilly Mortgage Group, a McLean, Va.-based multifamily lender with a Fannie Mae Delegated Underwriting and Servicing presence, for an undisclosed amount. And in the other, FirstService Corp., a Toronto-based property services firm, has acquired a majority stake in Cohen Financial, Chicago, also for an undisclosed amount. The servicing portfolios are not the major impetus for the acquisitions, but they do change hands as a consequence.

Reilly Mortgage originates over $1.5 billion in new loans a year and also has a multifamily servicing portfolio of about $10 billion, according to Wells Fargo. The acquisition will add to Wells Fargo's over $95 billion commercial mortgage servicing portfolio, but Wells is more geared to adding to its lending offerings, as well as to gaining a presence in the Fannie Mae DUS space. Reilly provides financing to owners and operators of multifamily properties through Freddie Mac, Fannie Mae and FHA lending programs.

"Reilly Mortgage will significantly broaden Wells Fargo's ability to serve the needs of multifamily housing properties, and give us a presence in a number of new markets across the country," said Ed Blakey, head of Wells Fargo's Commercial Mortgage Group. "Wells Fargo, in turn, will be able to offer these customers a broader array of products and services to help satisfy all their financial needs and help them succeed financially."

Reilly Mortgage was the first mortgage banker approved under the Fannie Mae DUS program in 1988, according to Wells Fargo, and also one of the first companies approved as an FHA MAP (Multifamily Accelerated Processing) lender.

"Reilly Mortgage's success is due to its consistent focus on the multifamily sector," noted Tom Szydlowski, president and CEO of Reilly Mortgage. "Our expertise in originating, underwriting, structuring, selling and servicing multifamily real estate loans reflects Reilly Mortgage's employees specialized knowledge, and our strong relationships with FHA, Fannie Mae and Freddie Mac, and our borrower clients. We look forward to bringing ...