NEW YORK CITY—As the Royal Bank of Scotland prepares to exit the US commercial mortgage business, Societe Generale is coming back in. The French banking and financial services firm, which last contributed a commercial mortgage loan to a US securitization in 2007, said Wednesday afternoon that it had launched a US CMBS business, hiring a team from RBS to run it.

Heading SocGen's CMBS platform will be Wayne Potters, based at the company's New York offices. Potters headed RBS' commercial real estate group since 2013 and was hired by the bank as a VP in 2010. Previously, he held CMBS-related positions with Fortress Investment Group, Merrill Lynch and Credit Suisse.

Adam Ansaldi is also joining SocGen to head CMBS securitization. He previously oversaw the RBS CMBS group's distribution and securitization platform. Prior to RBS, he led the commercial real estate securitization group at JP Morgan/Bear Stearns from 2001-2009. Additional key team members include Gary Swon, Joey Petras, Chris Kramer and Peter Lewicki driving origination; Stewart Whitman managing REIT originations; David Goodwin managing CMBS credit; Jim Barnard and Justin Cappuccino in CMBS securitization; and Marty Black as CMBS underwriter.

SocGen said Wednesday that the re-launched CMBS platform is part of a global initiative to develop asset-backed product capabilities that will take advantage of “a trend towards increased securitization to finance the economy at a time when many banks' capacity to hold assets on their balance sheets is limited. The worldwide SocGen initiative is being led in the US by Hatem Mustapha, global head of the bank's special situations group.

This past November, RBS said it would get out of the asset-back securities and commercial real estate businesses in the US altogether, after initially announcing that it would pare these product lines down by two-thirds. The bank is exiting these US businesses to put greater emphasis on its commercial and retail banking in the UK.

SocGen's re-entry into the CMBS business here—which it exited in 2008—occurs at the outset of the so-called “wall of maturities.” In a report last month, Trepp noted that more than $300 billion in conduit CMBS loans are due to mature, thanks to a preponderance of 10-year balloon loans issued between 2005 and 2007. “That's more than 2.5 times the amount that matured from 2012 to 2014,” according to Trepp.

There's also the steadily increasing issuance of new CMBS. A Kroll Bond Rating Agency report forecasts increased CMBS originations this year, “due to improving CRE fundamentals in many markets and relatively low interest rates.”

Furthermore, the ratings agency says, “As more than $71 billion of private-label CMBS loans are expected to mature [in 2015] and borrowers seek refinancing opportunities on higher coupon loans, we anticipate that issuance may reach $110 billion. “ Actual issuance could come in higher, KBRA says, “if the economy maintains its current trajectory and interest rates remain as low as they have been for much of 2014. Our issuance forecast utilized conservative assumptions surrounding the refinance of prior CMBS5 loans and considered moderate interest rate growth.”

Instant Insights /

SocGen Re-Enters CMBS Business in US

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