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
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.
"Tintri was started in 2008 with the express purpose of building a storage appliance that is ideal for virtualized environments. We support a lot of different hypervisor platforms from VMware to OpenStack to Hyper-V," explained Dan Florea, Director of Product Management at Tintri, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
In their general session at 16th Cloud Expo, Michael Piccininni, Global Account Manager - Cloud SP at EMC Corporation, and Mike Dietze, Regional Director at Windstream Hosted Solutions, reviewed next generation cloud services, including the Windstream-EMC Tier Storage solutions, and discussed how to increase efficiencies, improve service delivery and enhance corporate cloud solution development. Michael Piccininni is Global Account Manager – Cloud SP at EMC Corporation. He has been engaged in t...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus o...
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...