Mount Street has beaten CR Investment Management to win Morgan Stanley’s legacy European CMBS loan platform transferring around €3.3bn of securitised loans to the newly-established commercial real estate loan servicer.
Mortgage Stanley Mortgage Servicing (MSMS), set up in 1998 to service the loans originated by the US investment bank for its CMBS conduit programme European Loan Conduit (ELoC), still includes nine CMBS transactions with an outstanding balance around €3.31bn or £2.74bn, by CoStar News calculations.
MSMS includes five UK CMBS loans with an outstanding balance of £1.54bn and four European CMBS loans with an outstanding balance of €1.45bn.
The UK loans include the BBC’s long-dated single tranche loan secured by BBC Broadcasting House, as well as the Moises and Mendi Gertner’s 21-strong UK Fox portfolio.
The outstanding loan expected to transfer to Mount Street include:
- Juturna (ELoC 16) – £772,026,630 outstanding (secured on the BBC building in Regent Street)
- Morpheus (ELoC 19) – £50.7m outstanding at August 2013 IPD
- Quirinus (ELoC 23) – € 108.4m outstanding at November 2013 IPD
- Silenus (ELoC 25) – €539.7m outstanding at August 2013 IPD
- Triton (ELoC 26)– £26.8m outstanding at October 2013 IPD
- Ulysses (ELoC 27) – £429m outstanding at October 2013 IPD
- Vulcan (ELoC 28) – €532.9m outstanding at November 2013 IPD
- Fordgate Commercial Securitisation No. 1 plc – £261.8m outstanding at October 2013 IPD
- Patrimonio Uno CMBS – €268.5m outstanding at December 2013 IPD
The sale of MSMS has been underway by Morgan Stanley for over the last 12 months and was first reported by CoStar News in April 2013.
Mount Street will accelerate their CMBS loan servicing platform and provide scale to win future business. Currently Mount Street manages around £400m of loans in special servicing, including the Windermere XIV SISU loan which Lone Star transferred from Hatfield Philips.
In the last year, Mount Street has picked up a further circa £1.6bn in new lending servicing mandates from lenders, including Renshaw Bay, with the positions spanning senior bilateral and syndicated positions, as well as mezzanine loans.
Mount Street and MSMS have connections dating back more than 15 years.
Ravi Jospeh, CEO and co-founder of Mount Street, headed Morgan Stanley’s Securitised Products Group (SPG) from 1998 until 2004, under which resided ELoC, then headed by Ellen Brunsberg, and EloC’s loan servicing platform, MSM.
Joseph hired Paul Lloyd, who joined Mount Street as managing partner from CBRE Loan Servicing in April last year, to set up MSMS, with Lloyd subsequently hiring Steve Northage as director and head of loan management and primary servicing last summer.
Earlier in the process, interest in MSMS also came from Capita Asset Services, C-III Capital Partners, CW Capital, Situs Companies and Solutus Advisors.
In mid-December, Mount Street bought the German commercial real estate loan servicing business of Crown, the loan servicing business owned by private equity firm Forum Partners. The three-strong German office is headed by Elke Wagner, who moved across from Crown.