DBRS Confirms CMLS Primary Servicer Evaluation of Good and Special Servicer Evaluation of Adequate, Issues Master Servicer Evaluation of Adequate

DBRS has today confirmed the evaluation of Good for CMLS Financial Ltd.’s (“CMLS” or “The Company”) Commercial Mortgage Primary Servicing capabilities and the evaluation of Adequate for its Commercial Mortgage Special Servicing capabilities. In addition, DBRS has assigned a rating of Adequate for The Company’s Commercial Mortgage Master Servicing capabilities.

CMLS is the second-largest independent Canadian commercial mortgage servicing company. The Company, originally known as Penmor Investment Services Ltd., is headquartered in Vancouver and has operated continuously since 1974. Consistently profitable, CMLS services for a variety of investors, including banks, insurance companies, investment managers, private lenders and CMBS trusts. The employee-owned company also maintains a significant commercial mortgage origination business, including its own CMBS platform, as well as a mortgage valuation business.

Among the strengths of CMLS are its experienced and tenured senior management team and its long history of third-party servicing throughout Canada, including CMBS. Additionally, The Company maintains a strong control environment and comprehensive internal audit program. The challenges CMLS faces include continuing to keep up servicing portfolio growth. The senior management team has effectively managed the company’s growth over the past several years and is planning appropriately for future growth. Another challenge is The Company’s future expansion into the Master and Special Servicer functions for future CMBS transactions. To this end, the company has revised or developed its policies and procedures manual to address these CMBS functions and has hired a senior manager with CMBS asset management experience.

As of June 30, 2012, the CMLS servicing portfolio consisted of 1,313 loans totaling $5.69 billion, compared with 1,180 loans totaling $4.6 billion as of June 30, 2011. CMLS continues to maintain a diverse roster of investor clients in its servicing portfolio, which continues to be well diversified by property type and geography throughout Canada.

The servicer evaluation reflects a comprehensive review of the CMLS organizational structure, the management team, asset administration, loss management, technology, staffing and training, procedures and controls and financial strength.

Notes:
All figures are in Canadian dollars unless otherwise noted.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodology is Commercial Mortgage Servicer Evaluations, which can be found on our website under Methodologies.