CRE Consolidation Continues Apace.

The theme of consolidation in the commercial servicing space continues, with all the major servicers adding to their portfolios at the end of 2007. According to the year-end rankings of commercial mortgage servicers by the Mortgage Bankers Association, Wachovia had the highest volume of primary and master servicing at $407.94 billion. Next on the list is Midland Loan Services/PNC RE Finance, with $268.55 billion.

In third, fourth and fith place respectively are Capmark Financial Group ($258.12 billion), Wells Fargo Bank ($175.6 billion), and KeyBank Real Estate Capital ($148.57 billion).

Looking back two years, to the end of 2005, it is clear that the top five list included these same top-ranked servicers, with all of them having added to their portfolios. Two years ago, Wachovia was at $233.18 billion, followed by GMAC (now Capmark) at $231.45 billion, Midland at $159 billion, Wells Fargo at $95.52 billion, and KeyBank REC at $84.93 billion. Three of these servicers have almost doubled their portfolios in the last two years. Capmark, which was bought out by private equity investors and has been in the throes of change, has seen minimal gain. And KeyBank REC has more than doubled its portfolio.

When it comes to servicing of commercial mortgage-backed securities (CMBS) loans (in which category the MBA's 2007 December rankings also includes servicing of assets in collateralized debt obligations (CDOs) and other asset-backed securities), Wachovia leads again ($291.2 billion), followed by Capmark Financial ($152.03 billion), Midland Loan Services ($147.42 billion), Wells Fargo ($134.59 billion), and Bank of America ($114.78 billion).

Two years ago, the leaders in this space were pretty much the same: Wachovia ($154 billion), Capmark ($129 billion), Midland ($104 billion), Wells Fargo ($67.57 billion), and KeyBank REC ($56.5 billion). Bank of America was sixth, with a $53 billion portfolio.

It's obvious that all the major servicers in this category have handily boosted ...