NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the commercial real estate servicer ratings for Berkeley Point Capital LLC (BPC), as follows:
-- Commercial primary servicer at 'CPS2';
-- Commercial special servicer at 'CSS3+'.
The primary servicer rating reflects an assessment of the company's experienced management team, effective use of technology, increased property type diversification, as well as the materiality of servicing functions outsourced to Midland Loan Services, a division of PNC Bank, National Association (Midland) through a private label shared services arrangement.
BPC's servicing platform includes a long standing shared services relationship with Midland since 2006. Through the agreement, Midland performs certain servicing functions such as cash management, taxes and insurance while BPC retains responsibility for customer service, investor reporting, asset administration, and oversight of Midland performed functions. Fitch views positively BPC's ability to manage the contracted services, and recognizes the presence of alternative service providers available in the market, as well as the low likelihood of an unforeseen termination of the outsourcing relationship. Fitch believes BPC's existing staff has the ability to perform contracted services in-house, but expects additional resources would be required to meet capacity needs. The degree and materiality to which servicing processes are performed outside the rated servicer limit the ratings to the 'CPS2' category.
The special servicer rating reflects the company's special servicing platform which is currently focused on multifamily properties for government-sponsored enterprise (GSE). Workout functions are performed in consultation with the GSE until foreclosure at which time the assets become managed by the GSE. Fitch believes this is mitigated by experience of the special servicing team with other asset types and real estate owned (REO) dispositions. Additionally, if necessary, the special servicing team can draw resources from the primary servicing platform.
Both ratings reflect that the company has changed ownership groups twice since 2012, most recently when acquired by Cantor Commercial Real Estate Company, L.P. (CCRE) in 2014. Fitch performed a financial assessment of BPC on a stand-alone basis and determined that its short-term financial viability is adequate to support the servicing platform.
BPC has been originating and servicing multifamily GSE loans since 1987. Subsequent to its acquisition by CCRE in 2014, BPC began primary and limited sub-servicing for CCRE CMBS loans expanding the firm's experience with non-multifamily CRE property types and non-agency servicing.
As of March 31, 2016, BPC's total servicing portfolio consisted of 2,940 loans totaling over $52.2 billion, 65% of which were multifamily properties. As of the same date, approximately 55% of the serviced portfolio was for GSEs, 28% was CMBS limited sub-servicing, with the remaining 17% CMBS (Freddie Mac K Series transactions), third party, and life company.
The servicer rating is based on the methodology described in Fitch's reports 'Rating Criteria for U.S. Commercial Mortgage Servicer,' dated Feb. 14, 2014, and 'Rating Criteria for Structured Finance Servicers' dated July 1, 2016, available on Fitch's web site www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria
Rating Criteria for Structured Finance Servicers (pub. 01 Jul 2016)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884140
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=1009002
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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