Truist Financial Corp. sold one of its commercial real estate lending and asset management businesses and dismantled an old SunTrust Banks platform that manages CRE assets of $ 34 billion.
Charlotte, NC, Truist, a $ 506 billion company formed last December from the merger of BB&T and SunTrust, sold its Cohen Financial platform to one no, according to a September 18 press release mentioned price to SitusAMC Holdings Corp.
The New York-based service company will integrate Cohen into its own service and asset management group under the SitusAMC brand.
However, Trust will retain Cohen's debt advisory and placement platform and the bank will continue to have a role in the issuance, maintenance and management of credit and debts through its Grandbridge Real Estate Capital division, which was a subsidiary of BB&T prior to the merger Play CRE credits.
"This transaction allows us to refine our focus as we continue to integrate operations into Grandbridge," said Truist in a statement on the transaction.
Truist did not disclose any reasons for the sale. However, the bank, headed by chairman and managing director Kelly King, has tried to cut costs and operating costs significantly as part of its ongoing integration efforts.
As of August 31, Cohen Financial had approximately 6,900 loans with an unpaid balance of $ 34 billion.
The sale includes the transfer of approximately 122 Cohen employees to SitusAMC. SitusAMC will, however, maintain the existing service partnerships with Truist and Grandbridge.
The transition will reunite two former Cohen Financial executives with their old businesses. Tim Mazzetti, Head of US Service and Asset Management at SitusAMC, and Dean Wheeler, Head of Customer Service Delivery, were with Cohen between 2006 and 2019 and led the development of the platform for credit service and asset management for structured finance and CRE / Multifamily Loan assets for institutional clients.
They kept their roles at Cohen when the company was acquired by SunTrust in 2016, but moved to SitusAMC last year. (SitusAMC, which operates in the US, Europe and Asia-Pacific, is majority-owned by funds from private equity firm Stone Point Capital.)
"We are very excited to have the opportunity to buy back our platform that we have built for more than 12 years," said Mazzetti in an interview.
Kelly King, Truist Chairman and CEO
Mazzetti said the Cohen portfolio will primarily add CRE loans from life insurance companies to the SitusAMC group, as well as a portfolio of investor mortgages, which are backed by single-family rentals and often grouped into mortgage-backed securities.
(The SitusAMC portfolio includes approximately 10,000 loans with a total outstanding balance of $ 130 billion, consisting mainly of larger CRE loans with structured finance, which are typically used to finance construction or bridge financing. SitusAMC also acts as a specialist service provider for bad loans.)
Neither portfolio deals with traditional CMBS loans for conduits, which have seen huge increases in arrears and defaults, Mazzetti said. "It's very similar to the agency and some of the other books you see (with) insurance companies and bank block portfolios," he said.
“Sure, there has been a significant increase (in arrears), but it's not nearly the same as CMBS. We don't see anything like that. "