articles Ratings /ratings/en/research/articles/211124-3650-reit-loan-servicing-llc-average-commercial-mortgage-loan-special-servicer-ranking-affirmed-ranking-outlo-12199945 content esgSubNav
In This List
NEWS

3650 REIT Loan Servicing LLC AVERAGE Commercial Mortgage Loan Special Servicer Ranking Affirmed; Ranking Outlook Stable

Take Notes:Sustainable Covered Bonds Recap and Outlook

NEWS

Strained Property Developers Might Affect China RMBS

COMMENTS

China Securitization: How Strained Property Developers Might Affect Existing RMBS

COMMENTS

Australia In 2022: Omicron Adds Bumps On The Road To Recovery


3650 REIT Loan Servicing LLC AVERAGE Commercial Mortgage Loan Special Servicer Ranking Affirmed; Ranking Outlook Stable

Overview

  • 3650 REIT Loan Servicing LLC performs asset management, loan servicing, and loan workout and resolution for subsidiaries of its parent company, 3650 REIT Holding Co. LLC, a commercial real estate lending, investment management, and services firm.
  • We affirmed our overall AVERAGE ranking on 3650 REIT Loan Servicing LLC as a commercial mortgage loan special servicer.
  • The ranking outlook is stable.

NEW YORK (S&P Global Ratings) Nov. 24, 2021--S&P Global Ratings today affirmed its AVERAGE ranking on 3650 REIT Loan Servicing LLC (3650 Loan Servicing) as a commercial mortgage loan special servicer. The ranking outlook is stable.

Our ranking reflects 3650 Loan Servicing's:

  • Experienced senior managers, including several who previously held leadership positions at other S&P Global Ratings-ranked commercial mortgage loan special servicers;
  • Small staff size and limited operating history as a newer venture;
  • Formal training program that supplements on-the-job training;
  • Good leverage of a third-party asset management and special servicing system;
  • Thorough, though newly developed, internal control environment that is built on a solid framework and includes a well-defined delegation-of-authority matrix and internal audit regime; and
  • Limited special servicing resolution track record within the current platform.

Since our prior review (see "Servicer Evaluation: 3650 REIT Loan Servicing LLC," published March 11, 2020), the following changes and/or developments have occurred:

  • The head of loan servicing left the company and was replaced by a senior vice president, who has significant tenure with 3650 Loan Servicing LLC and its parent company. Prior to taking on the new role, the head of loan servicing was a senior manager at the company and has also held several senior manager positions at Grass River Property LLC, an affiliate of 3650 Loan Servicing's parent company. Previously, the new head of loan servicing was a senior portfolio manager at another S&P Global Ratings-ranked commercial mortgage loan special servicer.
  • The named CMBS special servicing portfolio grew to six transactions with 149 loans and approximately $3.8 billion in unpaid principal balance (UPB) as June 30, 2021 from one transaction with 32 loans and approximately $828.0 million in UPB.
  • The active special servicing portfolio grew to two assets from zero, and has a UPB of approximately $37.3 million as of June 30, 2021.
  • An external third party was engaged to conduct internal audits of 3650 Loan Servicing.
  • The parent company successfully implemented its disaster recovery and business continuity plan in response to the COVID-19 pandemic. Employees were able to work from home effectively utilizing MS Teams and other real-time technology to facilitate communication. Most employees are now working in the office.
  • In response to the distress caused by the COVID-19 pandemic and associated lockdown measures, the special servicing team successfully limited transfers to special servicing by proactively reaching out to borrowers to provide assistance. The team also created an updated asset business plan template to analyze and process borrower relief requests.
  • 3650 Loan Servicing worked with its vendor to make several improvements to its third-party special servicing system environment, including enhancing the borrower consents form, which now auto-populates and allows approvals within the system.

The ranking outlook is stable. 3650 Loan Servicing has built the infrastructure to be a capable commercial mortgage loan special servicer and has tested its controls and systems through the management of a small portfolio of special servicing assets, as well as its performing loan portfolio. We expect that it will maintain the people, processes, and technology needed to effectively administer a special servicing portfolio consistent with its near-term growth strategy.

The financial position is SUFFICIENT.

This release does not constitute a rating action.

Related Research

Servicer Analyst:Paul L Kirby, New York + 1 (212) 438 1365;
paul.kirby@spglobal.com
Secondary Contact:Steven Altman, New York + 1 (212) 438 5042;
steven.altman@spglobal.com
Analytical Manager, Servicer Evaluations:Robert J Radziul, New York + 1 (212) 438 1051;
robert.radziul@spglobal.com

No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.


Register with S&P Global Ratings

Register now to access exclusive content, events, tools, and more.

Go Back