Wells Fargo commercial servicing sale makes Trimont a leader

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Wells Fargo plans to exit the third-party, non-agency commercial mortgage servicing business through a sale that will make the buyer a leader in one portion of the U.S. market.

The Atlanta-based Trimont has agreed to buy non-agency servicing in the acquisition.

Wells will retain certain servicing for government-related mortgages. Värde Partners, an investment firm specializing in credit and credit-related assets that bought Trimont in 2015, backed the deal. 

Like Wells' single-family correspondent channel exit and the downsizing of its related servicing portfolio last year, the latest move is in line with the bank's efforts to slim down its operations.

"This transaction is consistent with Wells Fargo's strategy of focusing on businesses that are core to our consumer and corporate clients," said Kara McShane, executive vice president and the head of Wells' commercial real estate division, in a press release.

"We remain committed to our market-leading commercial real estate business, and we will continue to service our clients with a broad suite of lending, advisory and capital markets capabilities," she added.

Wells was the second largest depository in commercial real estate lending based on its loan volume at the end of the first quarter, according to a ranking published in June by NMN's sister publication, American Banker. It was the eighth largest Fannie Mae multifamily lender last year.

Meanwhile, Trimont reported that the sale will make it the top servicing player in the securitized portion of the domestic commercial real estate market.

After the acquisition is complete, Trimont will be handling $640 billion in U.S. loans, an amount it calculates is equivalent to around 11% of U.S. CRE. Globally, Trimont manages more than $715 billion in commercial real estate loans.

"The addition of Wells Fargo's commercial mortgage servicing business is accretive to Trimont and will strengthen its market position for years to come," said Jim Dunbar, chairman of the latter company and a partner at Värde, in a separate press release.

The two parties to the acquisition expect it to close early next year, subject to customary closing conditions.

Wells tapped its securities division as the financial advisor for the transaction. It also obtained legal advice in connection with the deal from the law firm of Wachtell, Lipton, Rosen and Katz.

Trimont and Värde's financial advisors were JPMorgan Securities and Goldman Sachs. The buyers also worked with two law firms, Trilegal and Cadwalader, Wickersham & Taft.