Fitch Ratings – New York – 20 Apr 2026: Fitch Ratings has upgraded ColumbiaNational Real Estate Finance, LLC’s (CNREF) commercial primary servicer rating to ‘CPS2+’ from ‘CPS2’. The Rating Outlook is Stable.

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CNREF’s upgrade reflects its strong primary loan servicing performance over more than 25 years, which compares favorably with that of highly rated peers. The upgrade also reflects the company’s clean operating history over the past three years, with no exceptions, tax penalties, significant restatements, or reported errors. CNREF has continued to invest in technology, including recent enhancements to its cybersecurity infrastructure.

The rating also considers lower staff turnover and team growth. Although the small team presents some key-person risk, robust cross-training partially mitigates that risk. The rating further reflects strong sponsor support for the servicing team, increased automation of certain manual processes, and governance infrastructure that is sufficient for the current portfolio and supported by outsourced annual internal audits.

CNREF acts as a correspondent lender and servicer mainly for life insurance companies, as well as U.S. Department of Housing and Urban Development (HUD) and securitized lenders. As of Sept. 30, 2025, life company loans made up 95% of the total servicing portfolio by loan count and HUD loans made up 5%.

CNREF has 30 employees, with production offices in Washington, D.C. and Baltimore. The company’s loan originations and servicing portfolio have diversified in recent years. Approximately 76% of loans are in Maryland, Virginia and Washington, D.C, down from 78%. CNREF has had correspondent lending relationships for more than 40 years and currently has 23 servicing clients. During the 12 months ending September 2025, the company added one new lender client, which will contribute to portfolio growth. The servicing portfolio has grown 11% by balance and 20% by loan count from YE23 through September 2025.

CNREF maintains an experienced servicing management team. Its two senior managers average more than 30 years of industry experience and 21 years of company tenure. The eight-servicing staff-level employees, up from seven the prior year, average 12 years of industry experience and five years of tenure with the company. Turnover returned to historically stable levels during the 12 months ended September 2025, with no staff departures compared with 22% in the prior year.

Since Fitch’s last review, CNREF added one staff-level employee in the asset management group with four years of industry experience, providing additional capacity to support portfolio growth. The limited number of employees creates key person risk, but Fitch believes staffing remains appropriate relative to the size and nature of the servicing portfolio. CNREF maintains some of the most experienced management and staff among Fitch-rated servicers and demonstrates proficient loan servicing.

The company uses McCracken’s Strategy loan servicing application Version 20A as its system of record. As of January 2025, the asset management team migrated the administration of commercial property inspections to a new third-party vendor portal. The company uses an optical character recognition tool to review financial statements for approximately 35% of loans in the servicing portfolio and to read loan documents, leases, and rent rolls.

CNREF maintains various quality control measures to provide management with reasonable assurance that daily servicing operations are performed in compliance with the policies and procedures of the company as well as various lenders and servicing agreements. CNREF does not maintain separate compliance and internal audit functions found at larger volume servicers. However, the company engages a third-party vendor to perform servicing audits, which have historically resulted in no findings, and it is subject to periodic lender and other external audits.

The company acted as primary sub-servicer for eight securitized loans totaling $73.0 million where it performs primary servicing functions limited to financial statement collection and site inspections while another servicer performs functions such as payment processing. As of Sept. 30, 2025, CNREF’s total servicing portfolio consisted of 898 loans totaling $7.7 billion.