| Acquisitions bolster the firm's loan originations to $19.3 billion. |
By Upendra Mishra
After originating $19.3 billion in real estate loans in 2001 and claiming the No. 2 spot on NREI's Top Financial Intermediaries survey, GMAC Commercial Mortgage Corp. is not resting on its laurels.
"Year to date, our overall financing is up 11% from 2001," declares David E. Creamer, chairman of Horsham, Pa.-based GMAC Commercial Mortgage Corp.
At a time when the economy is lagging and commercial vacancy rates are rising nationwide, Creamer attributes his firm's growth to acquisitions, low interest rates, improved customer service and the maturity of the commercial mortgage-backed securities (CMBS) market, which now accounts for about one-third of GMAC's business.
"There were a lot of skeptics about CMBS in the early 1990s, but the discipline of rating agencies has really helped maintain the quality of CMBS," Creamer says. "There was a substantial slowdown in the CMBS market in 1998, but we have recovered since then. I see that trend continuing."
CMBS volume in the U.S. was estimated to be $70 billion industry-wide in 2001. To capitalize on the growth of securitization, the company last year launched Realpoint, a Web-based resource for tracking and trading CMBS. GMAC also plans to continue forging key acquisitions and strategic partnerships. "We have a number of acquisitions in the works right now," Creamer says.
In 2001, GMAC acquired Keystone Mortgage Partners, which specializes in originating and servicing life insurance company mortgages. The firm also purchased Carey Kramer Co.-North Florida, a full-service commercial real estate financial services firm. GMAC's Affordable Housing Division and Newman Financial Services Inc. also acquired Paramount Financial Group, a real estate investment company specializing in financing for affordable housing.
The firm's acquisitions went beyond U.S. borders in 2001. Its parent company, Philadelphia-based GMAC Commercial Holding Corp., acquired UCB Healthcare Services Co. Ltd., a Great Britain-based servicer of nursing home loans, and forged a strategic alliance with Groupe Bazin, one of the oldest property management firms in France.
The company's international presence today extends to Japan, Ireland, France, Canada and Great Britain. These acquisitions helped GMAC to substantially grow its loan origination and servicing portfolio. In 2001, GMAC originated $19.3 billion in financing, up from $14.7 billion in 2000, a 31% increase. The firm's servicing portfolio today stands at over $150 billion, up from $134 billion in 2001 and $124 billion in 2000.
In 2001, the multifamily sector accounted for 36% of all loan origination by GMAC. The next two busiest sectors in terms of loans arranged were office at 17% and retail at 15%.
The company also is one of the leading approved lenders and servicers for Federal Housing Authority, Fannie Mae and Freddie Mac loan programs. A broad menu of financial products -- ranging from construction loans to tax-exempt bonds to securitization of commercial mortgages -- has helped the firm as well. And so has the firm's ability to offer loans of all sizes.
For example, GMAC recently arranged a second mortgage of $1.4 million for a 56-unit apartment complex in Kent, Wash. But it also provided $65 million in interim financing for The Sheraton World Resort, a 619,277 sq. ft. hotel in Orlando, Fla.
Last year, the firm also provided a $250 million construction loan to the One Liberty Street office tower in Boston and a total of $115 million to three malls in Oregon, Missouri and Kentucky. In 2000, GMAC arranged a $1.3 billion construction loan for the massive AOL Time Warner headquarters at Manhattan's Columbus Circle -- the largest construction loan in New York City's history.