The upgrade of RCA's special servicer rating reflects Fitch's assessment of the company's servicing abilities, improved control environment, and continued investment in its technology platform relative to a significant increase in named CMBS special servicing. At
During 2013, RCA's CMBS named special servicing portfolio increased substantially as Rialto named RCA special servicer on CMBS transactions in which its affiliates had control. Rialto continues to invest in CMBS 2.0 B-pieces having purchased 11 in 2013 and six through
The rating also reflects RCA's experienced management team, asset management capabilities, and ability to leverage the infrastructure of its parent, Lennar Corporation. While Rialto provides ancillary income to Lennar, it is unclear if the company will remain of strategic importance in the long-run as Rialto has taken steps to establish itself as a standalone company, publishing its own financial statements and raising new capital in the form of senior unsecured notes.
RCA is the operating entity of Rialto that performs all servicing, special servicing, and asset management functions. Rialto provides investment management for its portfolios as well as third-party clients. Rialto manages two private equity funds, Rialto Real Estate Fund I & II, which target opportunistic investments in distressed loans and real estate and subordinate bonds in CMBS 2.0 transactions and expects to begin raising capital for a third fund beginning in the fourth quarter of 2014. Rialto also established a mezzanine platform through
In accordance with Fitch's policy, an issuer appeal resulted in RCA providing additional information that ultimately led to a rating action different from the original rating committee outcome.
The servicer rating is based on the methodology described in Fitch's reports 'U.S. Commercial Mortgage Servicer Rating Criteria,' dated
Additional information is available at 'www.fitchratings.com'.
--'Rating Criteria for U.S. Commercial Mortgage Servicers' (
--'Rating Criteria for Structured Finance Servicers' (
Rating Criteria for Structured Finance Servicers
Rating Criteria for U.S. Commercial Mortgage Servicers
Source: Fitch Ratings
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