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DALLAS-Using an off-market deal to catapult itself onto the nation's top-tier loan servicing roster, KeyCorp will buy locally based Orix Capital Markets LLC by year's end. The Cleveland-based KeyCorp is marking its second acquisition of a North Texas company in four months.

"The acquisition is just the continuation of our longstanding growth strategy," says Marty O'Connor, senior vice president of KeyCorp's loan servicing and asset management division. He tells GlobeSt.com that the deal, which raises KeyCorp's portfolio from $45 billion to more than $70 billion, is a lock, stock and barrel buy that comes with 130 employees, who will be retained, and a long-term lease in Bank One Center at 1717 Main St. in Downtown Dallas. He says the plan is to partition the space to sever it from other Dallas-based Orix USA Corp. operations.

O'Connor says the financials won't be disclosed. As yet, there are no SEC filings to pinpoint the acquisition's cost. But, he did say the parties are "moving as quickly as we can" to ensure a closing by year's end.

The Orix buyout is KeyCorp's seventh acquisition in five years of a commercial mortgage servicing portfolio. In July, KeyCorp took over Dallas-based Malone Mortgage Co.'s lending and servicing divisions to become one of the Top 10 FHA servicers in the nation. With the latest move, KeyCorp is buying master and primary servicing rights as well as special servicing entitlements for a limited number of securitizations for which Orix is the special servicer. The plan is to have the CMBS portfolios fully integrated before the first quarter ends.

KeyBank Real Estate Capital will become one of the nation's five largest commercial mortgage loan servicers when the transaction closes. As of June 30, Orix was ranked 11th in the US after 11 years in the business. Orix Capital Markets is a subsidiary of Orix USA, which is part of the publicly owned, Tokyo-based Orix Corp.

Instant Insights /

KeyCorp Inks Off-Market Pact to Buy Second Dallas Firm in Four Months

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