Fitch Affirms Strategic Asset Services' Special Servicer Rating

NEW YORK--()--Fitch Ratings has affirmed the commercial mortgage special servicer rating of Strategic Asset Services, LLC (SAS) at 'CSS2-'.

The affirmation of SAS' special servicer rating reflects Fitch's assessment of the company's ability to resolve large pools of defaulted commercial real estate (CRE) loans based on the experience and tenure of management and staff, effective use of technology, and strong policies and procedures and internal control environment. The rating also reflects the company's relationship with H/2 Capital Partners, and potential conflicts of interest which are mitigated by the governance around asset management resolutions.

The rating also reflects the company's rapidly growing CMBS named special servicing portfolio which has increased 39% by balance since year-end 2013. The portfolio continues to perform and comprises mostly single borrower large loan transactions which have experienced minimal defaults since issuance. SAS has made significant investments in asset management technology as well as continues to enhance its policies and procedures in order to match the growth in the portfolio. Additionally, while the company's management and staff average only four years of tenure, they average 22 years of CRE experience and the group experienced no turnover in 2015.

SAS, with offices in Dallas, TX and New York, NY, was founded by the principals of H/2 to manage and special service CRE assets and credit investments. While originally a captive special servicer of H/2, the company began performing third-party special servicing for non-affiliated investors in 2014 and as of Sept. 30 2015, has been appointed by nine separate investors holding controlling class positions in three recent vintage CMBS transactions and one loan in a fourth transaction.

As of Sept. 30, 2015, SAS was named special servicer for 165 CMBS loans totaling $17.7 billion in 29 transactions, the majority of which are 2010 vintage or later single borrower or floating rate transactions. As of the same date, the company was also named special servicer on 53 non-CMBS loans with an unpaid principal balance (UPB) of $5.3 billion also on behalf of H/2. SAS' active special servicing portfolio as of the same date consists of one $24.1 million CMBS loan, three CMBS real estate owned (REO) assets representing $238.4 million, and two non-CMBS REO assets representing $289.6 million in unpaid balance.

The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated Apr. 23, 2015, available on Fitch's web site www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--Rating Criteria for Structured Finance Servicers (April 23, 2015);

--Rating Criteria for U.S. Commercial Mortgage Servicers (Feb. 14, 2014).

Applicable Criteria

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

Rating Criteria for U.S. Commercial Mortgage Servicers (pub. 14 Feb 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735382

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997419

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Adam Fox
Senior Director
+1-212-908-0737
Fitch Ratings, Inc.
33 Whitehall
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Robert Sutherland
Senior Director
+1-312-606-2346
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com
or
Hannah James, New York, +1-646-582-4947
hannah.james@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Adam Fox
Senior Director
+1-212-908-0737
Fitch Ratings, Inc.
33 Whitehall
New York, NY 10004
or
Secondary Analyst
James Bauer
Director
+1-212-908-0343
or
Committee Chairperson
Robert Sutherland
Senior Director
+1-312-606-2346
or
Media Relations
Elizabeth Fogerty, New York, +1-212-908-0526
elizabeth.fogerty@fitchratings.com
or
Hannah James, New York, +1-646-582-4947
hannah.james@fitchratings.com