Morningstar DBRS Confirms Commercial Mortgage Special Servicer Ranking for CWCapital Asset Management

DBRS, Inc. (Morningstar DBRS) confirmed its MOR CS1 commercial mortgage special servicer ranking for CWCapital Asset Management, LLC (CWCAM or the Company), a wholly owned subsidiary of CW Financial Services LLC (CWFS). The trend for the ranking remains Stable.

The confirmed ranking reflects the following considerations:

-- CWCAM’s highly experienced and tenured management team and asset managers, whose combined ranks include several commercial mortgage-backed securities (CMBS) industry veterans. Employee turnover also has been moderate over the past year.

-- The Company’s successful multidecade record resolving a sizable volume of troubled debt and real estate owned (REO) assets, which has involved many large-loan transactions. The Company continues to be among the highest-volume CMBS special servicers in terms of named transactions and active portfolio.

-- CWCAM’s well-controlled operating environment, including its analytics, disciplined asset deliberation procedures, and thorough CMBS-centric reporting practices.

-- A solid internal audit regimen, which includes annual Regulation AB attestations and other recurring examinations by third-party audit firms. A compliance committee, which convenes semimonthly, monitors procedural effectiveness and adherence to servicing agreements using key performance indicator metrics and various tracking reports. Additionally, the Company has a property manager audit program for REO assets.

-- CWCAM’s strong technology capabilities. The platform centers on the RealINSIGHT asset management application, which CWFS owns and hosts for other special servicers. CWCAM uses the application’s auction website to list and conduct asset sales as well. The Company has effective practices for data backup, system security, and recovery/business continuity testing. The asset management application also undergoes annual Systems and Organization Controls audits.

As of December 31, 2023, CWCAM was the named special servicer on 10,828 loans with a total unpaid principal balance (UPB) of $218.66 billion involving 336 transactions, including one commercial real estate collateralized loan obligation transaction and 228 Freddie Mac-sponsored securitizations. The active portfolio had a total UPB of $5.98 billion consisting of 207 assets (158 loans and 49 REO), up from $4.4 billion and 129 assets (91 loans and 38 REO) at YE2022.

All rankings are subject to surveillance, which could result in rankings being raised, lowered, placed under review, confirmed, or discontinued by Morningstar DBRS.

Morningstar DBRS North American commercial mortgage servicer rankings are not credit ratings. Instead, they are designed to evaluate the quality of the parties that service commercial mortgage loans. Although the servicer’s financial condition contributes to the applicable ranking, its relative importance is such that a servicer’s ranking should never be considered as a proxy of its creditworthiness.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American Commercial Mortgage Servicer Rankings (August 23, 2023; https://dbrs.morningstar.com/research/419592).

For more information on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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