Truist Financial Corp. has sold off one of its commercial real estate loan servicing and asset-management divisions, shedding a legacy SunTrust Banks platform that managed $34 billion in CRE assets.
According to a Sept. 18 news release, Charlotte, N.C.-based Truist — a $506 billion-asset company formed last December from the merger of BB&T and SunTrust — sold its Cohen Financial platform to SitusAMC Holdings Corp. for an undisclosed sum.
The New York-based servicing firm will integrate Cohen into its own servicing and asset management group under the SitusAMC brand.
Trust will retain Cohen’s debt advisory and placement platform, however, and the bank will maintain a role in originating, servicing and managing agency and CRE loan assets through its Grandbridge Real Estate Capital division, which was a subsidiary of BB&T prior to the merger.
“This transaction allows us to refine our focus as we continue to integrate operations with Grandbridge,” according to a statement issued by Truist about the transaction.
Truist did not disclose reasons for the sale. But the bank, under chairman and chief executive Kelly King, has been seeking to vastly reduce expenses and operating costs as part of ongoing integration efforts.
As of Aug. 31, Cohen Financial serviced and managed approximately 6,900 loans with an unpaid balance of $34 billion.
The sale will include the transfer of approximately 122 Cohen employees to SitusAMC. SitusAMC will maintain existing servicing partnership ties with Truist and Grandbridge, however.
The transition will reunite two former executives of Cohen Financial with their old business. SitusAMC head of U.S. servicing and asset management Tim Mazzetti and Dean Wheeler, head of client service delivery, had been with Cohen between 2006 and 2019, leading the buildout of the loan-servicing and asset-management platform for structured-finance and CRE/multifamily loan assets held for institutional clients.
They maintained their roles at Cohen when the firm was acquired by SunTrust in 2016, but left to join SitusAMC last year. (SitusAMC, which operates in the U.S., Europe and the Asia-Pacific region, is majority-owned by funds with private-equity firm Stone Point Capital.)
“We're very excited to have the opportunity to buy our platform back, which we spent, you know, 12-plus years building,” said Mazzetti, in an interview.
Mazzetti said the Cohen portfolio will bring mostly CRE loans held by life insurance companies into the SitusAMC fold, as well as portfolio of investor mortgages secured by single-family home rentals that are frequently pooled into mortgage-backed securities.
(The SitusAMC portfolio totals about 10,000 loans with a combined outstanding balance of $130 billion, consisting primarily of larger, structured-finance CRE loans from which proceeds typically fund construction or bridge financing. SitusAMC also performs as a special servicer for troubled loans.)
Neither portfolio dabbles in traditional conduit CMBS loans, Mazzetti noted, which have seen a tremendous spike in delinquencies and defaults. “It's very similar to the agency and some of the other books you see [with] insurance companies and bank blocks portfolios,” he said.
“Sure, there's been a significant increase (in delinquencies), but it's not nearly the same as you're seeing in CMBS. We're not seeing anything like those numbers."
