Welcome!

News Feed Item

Morningstar Credit Ratings, LLC Affirms 'MOR CS2' Commercial Mortgage Primary Servicer Ranking for Situs; Raises Special Servicer Ranking to 'MOR CS1'

NEW YORK, April 2, 2014 /PRNewswire/ -- Morningstar Credit Ratings, LLC today affirmed its 'MOR CS2' commercial mortgage primary servicer ranking for Situs Asset Management LLC, and raised its commercial mortgage special servicer ranking for Situs Holdings, LLC to 'MOR CS1' from 'MOR CS2.' The affirmed primary servicer ranking and raised special servicer ranking are based on the following factors:

Primary Servicer Ranking:

  • Stabilizing operations: Situs had high staff turnover rates during 2013 as the company made further organizational modifications as part of a revised business strategy initiated in early 2012. Signs now indicate that the company's employee turnover rate in 2014 should be much lower.
  • Effective and strengthened technology: Situs has effective technology tools for its loan administration and portfolio management duties, which now involve more large-scale assets and customized reporting. In Morningstar's view, the company's conversion to a new servicing system in 2012, along with other completed technology enhancements, is strengthening its servicing capabilities.
  • Solid professional experience and depth: Situs has retained an experienced professional staff and an organizational structure that promotes portfolio management accountability. Situs also has an effective training function.
  • Sound internal audit and new compliance program: Situs has a multi-level internal audit function that examines its operations annually. Recently completed audits cited no material exceptions related to operational controls and procedures. Situs also established a formal compliance function for primary servicing in 2013.
  • Effective portfolio management: Situs has diligent practices to monitor collateral performance and handle credit issues. The company has experience with highly structured assets, distressed portfolios, and providing investors customized surveillance and asset management.    
  • No commercial mortgage-backed securities (CMBS) servicing history, yet robust client reporting capabilities: According to Morningstar, Situs has proven capabilities to deliver customized and detailed investor reporting. While the company has not yet served as a primary servicer for a government-sponsored entity or other CMBS, Situs services one securitized small-balance portfolio. The company also provides supplemental commercial real estate finance council (CREFC)-compliant portfolio surveillance reporting to certain CMBS investors.  

Special Servicer Ranking:

  • Extended record of asset resolution achievement: Situs demonstrates highly successful asset resolution performance results involving many challenging assets nationwide. Morningstar considers Situs to be a very adept CMBS special servicer. 
  • Very experienced professional team: Situs continues to have a highly experienced management team and asset managers. Adding further professional depth, the operation includes a dedicated asset management subsidiary for a bank-owned portfolio.
  • Excellent technology: Situs uses a highly effective proprietary asset management system that is well-suited for CMBS reporting and integrated with the company's other applications.
  • Well-controlled, diligent asset analytics and management: Situs has diligent and controlled asset analysis practices. The company also strengthened its real estate-owned (REO) property oversight by establishing an ongoing property management company audit program.   
  • Sound internal audit and compliance functions: The special servicing operation undergoes annual audits and has its own compliance function. Recently completed audits indicated no material exceptions related to operational controls and procedures.
  • Effective conflicts of interest management: Situs is a CMBS special servicer for transactions in which two affiliated investors respectively hold first-loss positions and are the controlling class holders. In Morningstar's view, Situs has sound practices to manage any conflicts of interest in this regard.

As of Dec. 31, 2013, Situs' primary servicing portfolio consisted of 879 loans with an unpaid principal balance (UPB) of approximately $12.1 billion. The portfolio included one securitized transaction and three commercial real estate collateralized debt obligation (CRE CDO) transactions. As of Dec. 31, 2013, Situs was the named special servicer for 1,907 loans with an approximate UPB of $23.2 billion, including 18 CMBS transactions. The company's total active special servicing portfolio contained 320 assets with a combined UPB of approximately $2.4 billion. The active CMBS portfolio comprised 97 assets with a combined UPB of approximately $1.2 billion.

The forecast for both rankings remains Stable. As a primary servicer, Situs should continue to operate effectively to meet its clients' servicing and portfolio management requirements. Morningstar also believes the company will continue to maintain the practices and expertise to serve as a highly effective special servicer for CMBS and other investors. 

To access Morningstar's operational risk assessment methodology and all published reports, please visit https://ratingagency.morningstar.com

About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a Nationally Recognized Statistical Rating Organization (NRSRO) that specializes in structured credit research and ratings, and offers a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions.

Morningstar Credit Ratings' rankings, forecasts, and assessments contained in this press release are evaluations and opinions of non-credit related risks, and therefore, are not credit ratings within the meaning of Section 3 of the Securities Exchange Act of 1934 ("Exchange Act") or credit ratings subject to the Exchange Act requirements and regulations promulgated thereunder with respect to credit ratings issued by NRSROs.

Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 446,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and had approximately $159 billion in assets under advisement and management as of Dec. 31, 2013. The company has operations in 27 countries.

Morningstar, Inc. is not an NRSRO and its credit ratings on corporate and municipal issuers are not NRSRO credit ratings.

©2014 Morningstar, Inc.  All rights reserved.

MORN-R

Media Contact:
Michelle Weiss, +1 267-960-6014 or [email protected]

SOURCE Morningstar, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...