CBRE buys out US loan servicing partner

The real estate investment firm has bought out GE Capital from its US loan servicing joint venture.

CBRE has completed a buy-out of GEMSA Loan Services, its US joint venture with GE Capital, and rebranded as CBRE Loan Services for servicing globally, PDI sister title REC reported.

CBRE Loan Services will deliver all of the firm’s loan servicing activities, sitting within CBRE’s Capital Markets division and will be led by the firm’s head of loan services, Clarence Dixon.

CBRE Loan Services will manage more than $120 billion of CRE loans from offices in Houston, London, Frankfurt, Madrid and Sydney.

The launch of CBRE Loan Services is understood to be a response to the demise of GE Capital. GE decided last year that it would sell off its financial division over the next two years.

GEMSA was formed in 2001 as a commercial loan servicing joint venture between CBRE and GE Capital. The JV was based in Houston and serviced loans for clients including life insurance companies, Freddie Mac, Fannie Mae, the Federal Housing Administration, as well as CMBS pools and pension funds. GE Capital loans did not form a large proportion of the JV’s book.

In its 2014 results, CBRE said that GEMSA serviced some $118.1 billion of mortgage loans, $85.2 billion of which related to the servicing rights of CBRE Capital Markets.

The US market accounts for the majority of CBRE Loan Services’ book at its launch, with around $30 billion of European loans under management. The Asian part of the business, which was launched last year, accounts for a smaller proportion.

European and Asian growth is likely to be a priority for CBRE Loan Services, although the unit is understood to also be targeting significant growth in the US. It is expected to take a more aggressive approach to winning business in the competitive US market now that it is under the single ownership of CBRE and will aim to channel business from its wider CRE finance activities.

“At CBRE we understand the underlying real estate asset as much as we understand the loan,” said Dixon. “This combination enables us to provide our clients with innovative solutions to meet their complex commercial real estate finance needs. Launching CBRE Loan Services globally means our clients can receive the same high level service and consistency anywhere in the world.”

Chris Shamaly, previously general counsel of CBRE Capital Markets, will become senior managing director leading CBRE Loan Services in the Americas. Long-time GEMSA managers Chris Gaas, Steve Rapp and Dave Haley will transfer to CBRE, reporting to Shamaly.

“Top quality loan servicing is a core strength of CBRE and, through the new CBRE Loan Services, we will continue to provide the high level of service that our clients expect of us, while further growing the practice in the US,” said Shamaly.

In Europe, Steve Harle has recently been recruited as head of business strategies and development to support the growth of the CBRE Loan Services’ European platform. The Asia Pacific arm of CBRE Loan Services is managed by Martin Priestley in Sydney.