At first glance, it may seem there is not much left for GMAC Commercial Mortgage to accomplish in the realm of mortgage lending and servicing.

Established as a separate business unit by GMAC Financial Services in the wake of the real estate crash of the early 1990s, GMACCM has done nothing but grow, primarily through merger and acquisition.

Starting out with four offices and a $5 billion loan-servicing portfolio in 1994, the company bought Republic Realty Mortgage Corp. in 1995, effectively doubling its servicing portfolio. Later that year, GMACCM acquired more than $4 billion worth of HUD mortgage servicing rights from Fannie Mae, bringing a largely multifamily-oriented servicing portfolio up to $15 billion.

Further acquisitions have added size and product diversity to GMACCM. The purchase of Lexington Mortgage Co. in 1996 established the company as a major player in the production and servicing of hospitality-industry loans. That same year, the acquisition of The Hanford/Healy Cos. helped GMACCM expand the range of services it could offer both borrowers and lenders, allowing it to serve as primary, master or special servicer as appropriate.

Today, GMACCM is a Horsham, Pa.-based, full-service, vertically integrated mortgage provider active in the multifamily, hospitality, healthcare, retail and industrial-product sectors. It has 34 origination offices and more than 900 professionals and support personnel worldwide. Its loan production network committed on more than $7 billion worth of mortgages in 1997, up from nearly $4 billion in 1996.

At the same time, on the servicing side, its $40 billion portfolio (up from $25 billion in 1996) captured the top spot as the nation's largest commercial mortgage servicer for the second consecutive year, according to the Mortgage Bankers Association of America.

Also, Fitch IBCA, one of the world's most prominent credit rating agencies, recently affirmed the company's master servicing rating, along with rating GMACCM's Asset Management Division "superior." Both of these are Fitch IBCA's highest ratings.

View from the top But recognition as the biggest and best in servicing, and as the largest commercial mortgage banker in the country, has not made GMACCM complacent. "There are still a few more pieces we need to add to become a true full-service mortgage provider," says David E. Creamer, GMACCM president.

GMACCM makes heavy use of technological innovation in its business, using computer technology to simplify and streamline the myriad flows of information in the mortgage banking process. "Technology is a strong play for us," says Creamer. "We believe our success to date has been driven by technology, and we'll be making more moves in this area."

In one such recent move, GMACCM purchased West Hartford, Conn.-based Mortgage Analytics Inc., a provider of consulting and software development services to the commercial mortgage industry.

The software company was attractive, notes Creamer, because it has developed programs that generate and analyze cash flows, yield tables, risk management and profitability reports over a range of performance assumptions. "This technology will help us provide a higher level of service to all of our investors and borrowers, in terms of providing them with information on market conditions and product performance, he says."

GMACCM is targeting essentially all types of commercial real estate in its continuing drive to expand. In particular, notes Creamer, the company will move toward working with HUD programs in both multifamily and healthcare, and will step up activity in the affordable housing sector. "We are already a dominant player in the healthcare field on the conventional side," he says, "so adding more activity on the HUD side will be a natural [complement]."

Multifamily properties currently make up the biggest part of the company's business. "In terms of dollar volume," says Creamer, "shopping centers are in the No. 2 position."

Focus on shopping centers Retail properties currently make up about 20 percent of the company's loan portfolio, says Stuart L. Greenberg, GMACCM senior vice president. Speaking from his office in Chicago, Greenberg says, "Refinancing transactions on existing properties is probably the biggest source of loan demand for retail properties, followed by acquisitions."

GMACCM is active in all aspects of shopping center financing, says Vice President John Oharenko, also based in Chicago. "We do construction and permanent financing, acquisition financing, and will look at joint ventures on a case-by-case basis," he says. "We also do portfolio funding for a number of REITs [real estate investment trusts], as well as for a variety of other institutional clients."

Oharenko reports that shopping center finance is currently in a period of stability, for several reasons. "Right now, retail is a lot more disciplined than the other property types," he notes. "It was heavily affected by the repositioning of retailers a few years ago that, for the most part, is now over."

New shopping center development deals today are fairly logical, Oharenko says. "We are not seeing that much truly speculative development," he notes. "What we are usually seeing are centers with 80 percent preleasing, anchored by food and drug tenants."

On the lending side, too, notes Greenberg, there is more restraint these days. "For the most part, we are not seeing the same kind of undisciplined underwriting we saw in the 1980s," he says.

Markets and information Demand for shopping center-related loans is currently fairly constant across the nation's markets, says Greenberg. "Demand is pretty much balanced geographically," he notes. "With the interest rate environment as favorable as it is, and the abundance of capital that exists, demand for financing is about the same throughout the country."

Underwriting transactions for shopping center properties, particularly construction in new markets, is easier than for other property types, according to Oharenko.

"In the retail industry, as opposed to other property types, the capital markets follow the retailers," he says. "If a trade area makes sense for a particular retailer, they are going to build. And if they have picked out a location, they have basically done our homework for us," in amassing the market information necessary to assess the deal. However, GMACCM also has its own market information as reference points.

Outlook Both Greenberg and Oharenko are optimistic about prospects for the shopping center marketplace during the balance of 1998.

"There is a lot of capital out there and a lot of people looking to refinance," says Greenberg. "The economy is reasonably sound, and there has been very little overbuilding - except in some pockets - when it comes to retail, as has been the case with other product types for the past five years."

Meanwhile, he says, lenders are scrutinizing new construction deals more carefully these days. "They are looking a little closer to make sure that there is a real need for the property - and that it is not just being built for the heck of it."