Fitch Assigns Commercial Servicer Ratings to Cohen Financial
--Commercial primary servicer 'CPS2-';
--Commercial loan level special servicer 'CLLSS3+'.
The primary servicer rating reflects Fitch's assessment of the company's experienced and tenured management and staff, policies and procedures, internal control environment consisting largely of automated controls, and technology platform. Fitch found Cohen to maintain sufficient technology infrastructure, including the Enterprise! Servicing system supplemented with an ancillary application to assist with managing workflow for both primary and special servicing tasks.
The special servicer rating reflects the company's asset management capabilities, workout experience which has largely focused on small balance loans for third-party clients, and small actively specially serviced portfolio. The assignment of the loan level special servicer rating considers Cohen's limited internal control environment, lack of a centralized asset management system, shared special servicing staff, which limit the company's ability to manage large volumes of defaulted mortgage loans.
Cohen's business lines consist of a traditional mortgage banking platform and its loan servicing and advisory services platform. The company performs commercial loan servicing for affiliates and third-party clients, including banks, insurance companies, pension funds, private equity and hedge funds, specialty finance companies and other institutional investors.
As of June 30, 2016, Cohen's total servicing portfolio consisted of over 3,500 loans totaling $32.1 billion, including a diverse set of collateral property types. The servicing portfolio is comprised of CMBS ($1.90 billion) and non-CMBS ($30.2 billion). The non-CMBS portion of the portfolio includes servicing various types of clients: institutional (63%); agency (10%) and Life Company (18%).
Cohen's named special servicing and asset management portfolio includes approximately $900 million of commercial mortgage loans as of June 30, 2016, with an average balance of approximately $5 million per loan on behalf of various clients, largely made up of private equity funds. As of the same date, the company was actively servicing 20 defaulted CMBS loans and managing one real estate owned (REO) asset with a combined outstanding principal balance of $41 million as well as 65 non-CMBS loans and 68 non-CMBS REO assets with a combined outstanding principal balance of $112 million.