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

DBRS has today confirmed the evaluation of Good for CMLS Financial Ltd.’s (CMLS or the Company) Primary Commercial Mortgage Servicing capabilities and the evaluations of Adequate for its Master Commercial Mortgage Servicing and Special Commercial Mortgage Servicing capabilities.

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

Among the strengths of CMLS are its highly experienced and tenured senior management team and the Company’s long history of third-party servicing, including legacy and recently issued CMBS. Additionally, CMLS continues to maintain a strong control environment and comprehensive internal audit program. CMLS’ challenges include adapting to its relatively new roles as CMBS Master and Special Servicer. The Company continues to revise and develop CMBS-specific policies and procedures and, thus far, has done a good job with its investor reporting for its trusts. The senior management team has effectively managed portfolio growth over the past several years and continues to plan for future growth by hiring new employees as necessary and using technology to develop servicing efficiencies.

As of March 31, 2014, the CMLS commercial mortgage servicing portfolio consisted of 1,598 loans totaling $8.79 billion, of which 72 loans totaling $1.06 billion were CMBS. CMLS continues to maintain a diverse roster of investor clients in its servicing portfolio. In addition, the portfolio 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

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

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