01/28/2011

KeyBank Getting Back Into the CMBS Game

Add KeyBank to the growing ranks of lenders reviving securitization shops.

The Cleveland bank has started to rebuild its commercial MBS team by hiring three experienced originators. And it plans to add four more soon.

Key was a mid-tier conduit shop in terms of volume before the market crashed. It contributed $3 billion of loans to securitizations in 2007, the last year of major issuance. That ranked 22nd among securitization programs, according to Commercial Mortgage Alert's CMBS Database.

The origination goals for 2011 are unknown, but the revived program closed its first loan last month. The average loan size is projected to be about $11 million, the same as before Key pulled out of the CMBS market three years ago.

The CMBS group remains under the direction of senior vice president Clay Sublett, who also oversees the Ginnie Mae lending program. He reports to real estate chief E.J. Burke.

One of the new recruits has already started. Randy Martin joined in Chicago last month from Charlotte-based Grandbridge Real Estate Capital. He reports to Dan Baker, who runs CMBS originations. The two other loan pros recently hired will come on board within a month. The origination specialists, including Baker, are vice presidents.

Key plans to station recruits in various offices in the Northeast, Southeast and Northwest, where they will mostly focus on arranging loans for the bank's mid-size clients. One will be assigned to handle publicly traded REITs, working out of Atlanta, Boston or Cleveland.

Before the CMBS market collapsed, Key frequently contributed loans to Credit Suisse securitizations. It hasn't yet decided which lenders it will work with this time around.

The last batch of loans that Key securitized, totaling $150 million, was funneled into an $887.2 million offering that Credit Suisse and Morgan Stanley brought to market in March 2008 (Credit Suisse Commercial Mortgage Trust, 2008-C1).

Meanwhile, the bankers on the other side of Sublett's lending group expect to originate and securitize about $600 million of FHA loans via Ginnie Mae this year, up from $330 million last year and $120 million in 2009.

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