ֳ

Rating Action Commentary

ֳ Affirms Aegon RA's Commercial Servicer Rating

Fri 14 Feb, 2020 - 11:40 AM ET

ֳ-New York-14 February 2020: ֳ has affirmed Aegon USA Realty Advisors, LLC's (Aegon RA) commercial servicer rating as follows:

--Commercial special servicer rating at 'CSS2'.

The affirmation of Aegon RA's special servicer rating reflects the experience of the company, which has been working out assets since 1991, the experience and tenure of the staff, and the company's detailed and thorough policies and procedures coupled with its multilayer internal control environment. The rating also considers the company's propriety asset management system and effective technology, as well as the financial support provided by its investment grade parent company, Aegon, N.V.

ֳ noted a second consecutive year of high turnover as a concern as aggregate employee turnover increased to 47% in 2019 from 38% the year prior. Turnover increased for staff and management level employees, which resulted in a smaller management team and increased number of staff level employees year over year. ֳ noted although aggregate turnover was 47%, it included several internal transfers, which if excluded would result in 26% overall turnover. ֳ noted there was no significant decline in the average tenure and experience of employees.

Aegon RA provides real estate investment services, including special servicing, for its general investment account and other unaffiliated third-party institutional investors including CMBS conduit and single-borrower transactions. The company's named CMBS portfolio has been driving growth in the overall special servicing business the last several years particularly in single asset single borrower transactions, which represent 78% of named CMBS transactions. CMBS special servicing accounts for approximately 75% by balance of the company's named special servicing portfolio, the majority of which is on behalf of third-parties. The company has special servicing experience across all major asset types, including multifamily, office, retail, industrial and healthcare, with properties spread across the U.S.

As of September 2019, there were no defaults in the company's CMBS special servicing portfolio comprised of 86 CMBS loans totaling of $37.2 billion in 79 transactions. Additionally, the company was named special servicer on 1,249 non-CMBS loans totaling $12.7 billion, of which six loans totaling $115.7 million and 20 REO assets totaling $147.5 million were being actively special serviced. Non-CMBS loans represent general account loans of the parent company as well as third-party special servicing.

ֳ's servicer rating methodology is described in ֳ's reports 'Criteria for Rating North American Commercial Mortgage Servicers', dated January 2020 and 'Criteria for Rating Loan Servicers' dated February 2020, which are available on ֳ's web site .

Contact:

Primary Analyst
Daniel Stallone
Director
+1-212-908-0861
ֳ, Inc.
300 West 57th Street
New York, NY 10019

Secondary Analyst
James Bauer
Director
+1-212-908-0343

Committee Chairperson
Sanja Paic
Senior Director
+44-20-3530-1282

Media Relations: Sandro Scenga, New York, Tel: +1 212 908 0278, Email: sandro.scenga@thefitchgroup.com

Additional information is available on
Applicable Criteria
Criteria for Rating Loan Servicers (pub. 07 Feb 2020)
Criteria for Rating North American Commercial Mortgage Servicers (pub. 22 Jan 2020)

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