Overview
- Grandbridge Real Estate Capital LLC, in business since 1994 and headquartered in Charlotte, N.C., is a full-service commercial mortgage banking company. It has been a wholly owned subsidiary of Truist Bank, (created by the merger of SunTrust Banks Inc. and BB&T Corp.) since December 2019. Truist Bank is the sixth-largest U.S. bank based on assets and deposits. Truist's assets and deposits are made up of approximately $504 billion in assets, $309 billion in loans, and $376 billion in deposits.
- We affirmed our overall STRONG ranking on Grandbridge Real Estate Capital LLC as a commercial mortgage loan primary servicer.
- The outlook is stable.
CENTENNIAL (S&P Global Ratings) Jan. 20, 2021--S&P Global Ratings today affirmed its STRONG ranking on Grandbridge Real Estate Capital LLC (Grandbridge) as a commercial mortgage loan primary servicer. The outlook on the ranking is stable.
Our ranking reflects Grandbridge's:
- Controlled growth and successful track record of serving lender clients and borrowers;
- Experienced and tenured management team and staff;
- Experience with multiple capital sources, along with a diversity of collateral property types and geographic locations;
- Solid financial and resource commitment to the technology systems needed to effectively manage the loan portfolio;
- Institutional backing and support of Truist Bank; and
- Good compliance and control environment, notwithstanding a somewhat less frequent internal audit schedule than most similarly ranked peers.
Since our prior review (see "Servicer Evaluation: Grandbridge Real Estate Capital LLC," published May 7, 2019), the following changes and/or developments have occurred:
- An all-stock merger between Grandbridge's parent, BB&T Corp. (BB&T) and SunTrust Banks Inc. (SunTrust) was completed, creating Truist Bank (Truist), the sixth-largest U.S. bank based on assets and deposits. As of June 30, 2020, Truist's assets and deposits were made up of approximately $504 billion in assets, $309 billion in loans, and $376 billion in deposits.
- Grandbridge's primary servicing portfolio grew nearly 30% to $38.3 billion unpaid principal balance (UPB) as of June 30, 2020, from $29.5 billion UPB on Dec. 31, 2018. This included approximately $8.0 billion in UPB that were transferred from Grandbridge's former Cohen/Truist division.
- Associated with the loan transfers, 21 employees from the former Cohen/Truist division were added to the asset management team, which included a senior vice president (SVP) of asset management and an SVP of asset management/insurance.
- The company responded to the COVID-19 pandemic by using technology needed for its employees to work remotely (nearly 100% of the employees have been working remotely without issues). The remote work capabilities was enhanced by Truist increasing its virtual private network's bandwidth across the enterprise.
- During the first six months of 2020, management reported that it received over 100 requests for payment relief from borrowers facing economic difficulties due to the COVID-19 pandemic.
- The company completed the transfer of its email platform from Lotus Notes to Microsoft Outlook.
The outlook for the ranking is stable. Like most servicers, Grandbridge has been challenged by an increased amount of relief requests from borrowers facing economic difficulties due to the COVID-19 pandemic, particularly following a prior benign default environment. We found that Grandbridge has responded to the challenges by implementing the technology needed for its employees to work remotely, and leveraging its loan officers, asset managers, and portfolio managers into an integrated team to handle relief requests. As a result, we believe that Grandbridge will remain a highly effective servicer based on its long history of commercial mortgage banking and commercial mortgage servicing experience.
The financial position is SUFFICIENT.
Related Research
- Select Servicer List, Dec. 1, 2020
- Truist Financial Corp, Oct. 12, 2020
- U.S. Commercial Mortgage Servicers Preparing For Impact From COVID-19, April 3, 2020
- Truist Financial Corp. 'A-/A-2' Ratings Affirmed On BB&T Corp. And SunTrust Banks Inc. Merger; Outlook Stable, Dec. 9, 2019
- Servicer Evaluation: Grandbridge Real Estate Capital LLC, May 7, 2019
- Analytical Approach: Global Servicer Evaluations Rankings, Jan. 7, 2019
This report does not constitute a rating action.
| Servicer Analyst: | Geoffrey C Danek, Centennial + 1 (303) 721 4689; Geoffrey.Danek@spglobal.com |
| Secondary Contact: | Marilyn D Cline, Farmers Branch + 1 (972) 367 3339; marilyn.cline@spglobal.com |
| Analytical Manager, Servicer Evaluations: | Robert J Radziul, New York + 1 (212) 438 1051; robert.radziul@spglobal.com |
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