Mount Street, the independent European commercial real estate loan servicer, has completed its acquisition of Morgan Stanley’s £4.5bn European real estate debt servicing arm.
The underbidder for MSMS was CR Investment Management Mount Street.
The £4.5bn European commercial real estate debt transferred to Mount Street includes the (€3.3bn) £2.74bn in nine remaining legacy Morgan Stanley CMBS deals in the European Loan Conduit (ELoC) programme.
The £1.76bn (€2.13bn) balance includes a mix of legacy unsold Morgan Stanley bilateral euro and sterling-denominated senior and mezzanine loans as well as loan agency mandates.
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.
The acquisition of MSMS will increase Mount Street’s commercial property loan book to around £8bn and more than double its headcount in the UK and Germany. The MSMS team is located in London and Frankfurt, and provides servicing on loans in the UK, France, Germany, Italy, Netherlands, Belgium and Switzerland.
Ravi Joseph, CEO of Mount Street, said: “We are delighted to have completed the acquisition of Morgan Stanley Mortgage Servicing – a business that has a great track record and reputation, and gives us a much larger platform in the CMBS space.
“Servicing is a very important part of what drives the performance and return on these loans, and Mount Street’s core objective is to bring a higher standard of professionalism and client service to this sector.”
Paul Lloyd, managing partner of Mount Street, said: “European clients of third party loan agency and servicing – lenders, loan buyers, and bond investors – all want to see more energy and talent focused on this sector.
“At Mount Street we are wholly focused on improving service and results to these clients. We are independent and management-owned, which means that we always go the extra mile to deliver results to our clients.”
Mount Street has in the past nine months won more than £3.5bn in new business, including servicing of new loans, servicing of impaired loans acquired by secondary loan buyers, and special servicing and workout of legacy loans in older CMBS deals.
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.
Last week, Mount Street won the loan servicing mandate over three Windermere XIVCMBS loans, unseating Hatfield Philips International, after an extraordinary resolution instigated by class A noteholder PIMCO.
The loans comprise the €252.2m Fortezza II Loan, the €53.9m Baywatch Loan and the €35.8m GSI Loan.
Bill Sexton, managing partner of Mount Street, added: “This accelerates the growth of our loan servicing platform exponentially, and also gives us the additional scale with which to win future business across Europe and continue to deliver unrivalled client service.”
Mount Street is 50% owned by senior management and 50% owned by Clayton Holdings, a US-based a provider of risk-based analytics and commercial loan due diligence, consulting and surveillance for loans and asset-backed securities.