Rialto Capital Management LLC Assigned ABOVE AVERAGE Commercial Special Servicing Ranking
Timothy E Steward, New York (1) 212-438-1000; firstname.lastname@example.org
Mark I Goldberg, New York (1) 212-438-1000; email@example.com
• We assigned an overall ABOVE AVERAGE ranking to Rialto Capital Management LLC as a commercial loan special servicer. The outlook is stable.
Rialto is a leading real estate investment management company focused on distressed and value-add investments, asset management, workout, and turnaround strategies. The company is a wholly owned subsidiary of public homebuilder Lennar Corp., one of the nation’s largest homebuilders. Rialto was founded in 2007 by the former co-founders of what eventually became LNR Partners LLC. Since late 2009, Rialto has invested in or commenced the workout or oversight of billions of dollars of real estate assets, including distressed commercial and residential real estate loans and properties as well as mortgage backed securities. Rialto’s investments and management capabilities include partnerships in more than $3 billion in structured transactions with the Federal Deposit Insurance Corp. (FDIC). The company has also been a sub-advisor and investor in a $4 billion public private investment fund with the U.S. Department of the Treasury. In recent years, Rialto has been one of the most active CMBS B-piece buyers. The company plans to increase assets under management by continuing to invest in and manage CMBS and nonperforming loan portfolios. Rialto’s special servicing operation is headquartered in Miami, Fla.
This is the first time we have assigned a commercial servicer ranking to Rialto. In the relatively short time that the company has been in existence, it has made considerable progress building the infrastructure necessary to manage portfolios of sub-performing and nonperforming commercial and multifamily mortgage loans and real estate assets. The assigned ranking reflects what we consider to be Rialto’s seasoned management team, solid audit and control environment, and good loan workout and REO processes.
KEY RANKING FACTORS Strengths:
• Effective use of technology and systems
• Good audit, compliance, and control environment
• “Servicer Evaluations: Servicer Evaluation Ranking Criteria: U.S.,” Sept. 21, 2004
• “Revised Criteria For Including RMBS, CMBS, And ABS Servicers On Standard & Poor’s Select Servicer List,” April 16, 2009
• “Standard & Poor’s Comments On Potential Conflicts Of Interest Within Commercial Special Servicing Market,” March 9, 2012
• “Select Servicer List,” updated monthly
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