Mount Street Group, a London-based global third-party loan servicing and credit asset management firm, last week hired Stephanie Petosa from New York law firm Dechert as head of US business development and client relations.
Petosa, who filled a similar role at Dechert and spent almost 20 years at Fitch Ratings as a senior executive for its commercial mortgage-backed securities group, is part of the firm’s plans to grow its US servicing platform. The firm services both performing and non-performing loans at a time when more loans are encountering difficulties, noted Kristin Bonczynski, head of Mount Street USA.
Mount Street believed Petosa’s industry experience and rich client relationships would be crucial for the firm to achieve business growth in the States. “It’s a good fit for Mount Street to have somebody focused on the business development aspect 100 percent,” Bonczynski said.
More demands for servicing
Bonczynski said though the number of deals transferred to special servicing were not as many as she expected so far, there were still a significant amount of loans coming to the third-party servicer in past months.
“We have seen an uptick [in loans coming into special servicing]. I guess I had expected it to be more at this point with where interest rates are today, but I do think it’s coming and I think the consensus is everyone’s preparing for [loans] coming down the pipeline here,” she said.
Bonczynski also added that office loans are seen disproportionally in special servicing. “We have seen some deals that have tipped over the last few months, [and] these are targeted towards office clearly, just with all of the office issues that are out there right now,” she said, adding that the sector is still suffering from the rising interest rates and low occupancy rate due to the lasting trend of working remotely.
Mount Street launched its US expansion in 2018 mainly to bring European clients’ business to the States, and its special servicing platform was not founded until 2021. “Fast forward two years later, we’re at $33 billion of assets under management in both primary servicing and special servicing,” Bonczynski said.
With a newly hired managing director in place to focus on client relations, Mount Street is seeking to develop businesses that target different loan situations.
Other than opportunities in performing asset management and construction loan administration, Bonczynski is also expecting to see more special assignments to support groups that are unstaffed or lack the expertise but want to enter the distressed commercial real estate loans space.
Speaking of client relations, Bonczynski said “the key is honestly communication,” adding that the servicer should talk to all parties and gather information beyond the numbers because each deal is different.
“You’re talking to market participants, you’re talking to brokers and trying to understand what the value is, you’re talking to leasing people to understand whether the tenants want to be in this area or they’re moving,” Bonczynski cited various aspects servicers should watch.
She also said that it’s crucial to give borrowers a good handle on value and an understanding of what they can fight for, though the valuation is still blurred due to a lack of transactions in the current market.
Looking ahead, Bonczynski expects to see more loans come through special servicing when borrowers are not able to refinance at maturity. “You will need to be able to either modify those loans or take them through special servicing in some way, shape or form, whether it’s a modification or foreclosure or something along those lines,” she said.