In a move that will catapult it into becoming the third-largest servicer of commercial and multifamily loans in the U.S., KeyCorp (NYSE: KEY ) announced yesterday that its commercial real estate arm, KeyBank Real Estate Capital, had entered into a series of agreements with Bank of America (NYSE: BAC ) to purchase the latter's commercial mortgage servicing portfolio of approximately $110.5 billion as well as a commercial mortgage-backed securities (CMBS) special servicing portfolio of about $14 billion.
When the transaction is completed, KeyCorp's commercial servicing portfolio will be approximately $205 billion in size.
KeyCorp also announced a separate agreement with Berkadia Commercial Mortgage, a unit of Leucadia National (NYSE: LUK ) , to act as subservicer on all CMBS primary servicing acquired from Bank of America while also acquiring Berkadia's CMBS special servicing business.
In total, KeyCorp will be named special servicer on approximately $47 billion of CMBS, making it the fifth-largest CMBS special servicer.
Marty O'Connor, KeyCorp executive vice president and head of KeyBank Real Estate Capital Loan Servicing and Asset Management, was quoted as saying: "Acquiring these portfolios allows us to further leverage our highly rated servicing platform. Our existing partnership with Berkadia will allow us to quickly integrate the Bank of America portfolios."
KeyBanc Capital Markets acted as financial advisor to KeyCorp in the acquisition.