Evaluated the Quality & Consistency of 100+ Loans for Inclusion in a CMBS for a Private Equity & Investment Management Firm

A top private equity and investment management firm was looking to buy the controlling piece of a new commercial mortgage-backed security (CMBS) in partnership with an outside investor. The partner wanted a third party to represent its interests and review the loans and the underwriting standards to ensure fairness during the Bid Stage and Sign-Off Stage (approximately a five-week time frame) -- prior to the remainder of the securitization going public.

The client engaged SitusAMC to provide securitization support and produce bid stage and sign-off stage attestation memos. These provided an educated perspective on the underlying collateral to verify that underwriting was accurate and unbiased. The SitusAMC team quickly digested reams of information, reviewed the underwriting on more than 100 loans and provided actionable analysis on each. The due diligence process involved reviewing $1.4 billion in loans ranging from a few million to $100 million, made on a wide variety of commercial properties across the U.S. The analysis was followed by eight roundtables lasting from two to six hours, in which loans were considered for the pool and either accepted, removed, price adjusted or restructured to shape the best possible deal. 

Informed by both its underwriting model and aggregate knowledge of properties, tenants and trends, SitusAMC identified issues with about 50 loans that it believed created a potential risk of default. Some of the issues were resolved by the contributing originators and other loans were removed from the pool, which was finalized at a value of approximately $1 billion.