OREANDA-NEWS. Fitch Ratings has affirmed Arbor Commercial Mortgage's, LLC (Arbor) commercial primary servicer rating at 'CPS2' and commercial loan level special servicer rating at 'CLLSS3+'.

The affirmation of the primary servicer rating reflects the company's demonstrated high performance in overall servicing ability. In addition, Fitch considered the company's experienced and tenured management team, policies and procedures for loan administration, as well as appropriate internal controls over primary servicing operations. The rating also considers the company's ongoing systems integration following its conversion to Enterprise! in November 2014. While the conversion to Enterprise! improves the technology platforms capacity, efficiency and control, it also resulted in elevated turnover in 2015 due largely to voluntary departures and internal transfers. Fitch notes, however, that turnover did not negatively impact the average experience and tenure of primary servicing employees.

The affirmation of the loan level special servicer rating reflects the company's workout and asset management capabilities for both Fannie Mae and non-agency special servicing for commercial real estate loans originated by Arbor and held on the balance sheet of ART or in CLO's. The rating also reflects the tenure and experience of the special servicing team, the quality of internal controls including policies and procedures for defaulted/nonperforming loan management, and limited special servicing technology. In 2015, Arbor began a project to integrate its legacy agency and structured asset management servicing teams into one group to be more closely aligned with primary servicing, adopt best practices, and bring both teams under common leadership, which Fitch believes will be beneficial to the platform once complete.

Arbor is a real estate investment and asset management firm that originates, underwrites, sells, and services primarily multifamily government sponsored entity (GSE) loans. Arbor Realty Trust (ART), an affiliated company and publicly traded REIT, originates and invests in real-estate related bridge and mezzanine loans, preferred equity, and other real estate related assets.

As of Sept. 30, 2015, Arbor's primary servicing portfolio consisted of 2,469 loans with an unpaid principal balance (UPB) of $12.3 billion, of which nine loans totaling $104.4 million were CMBS. As of the same date, Arbor was named the special servicer on 140 ART loans with an outstanding principal balance of $1.7 billion, none of which was CMBS. Arbor had 17 of these loans in special servicing with a principal balance of $244.6 million and four REO assets totaling $ 94.5 million.