give the banking company the benefits of the General Motors unit's considerable muscle in the commercial mortgage business.

Beginning in January, GMAC Commercial Mortgage, based in Horsham, Pa., is to station loan officers in several Bank One offices in the Midwest, West, and Southwest. Clients of the bank who ask for long-term, fixed-rate real estate loans of $1 million and up will be directed to GMAC's specialists.

GMAC will process, fund, and close the loans. In some cases it will pool them into commercial mortgage-backed securities, which it sells in the capital markets. It will also take over servicing of a $250 million portfolio of commercial real estate loans that the banking company originated and serviced for other investors.

The deal's term is five years. Other terms were not disclosed, but John E. Neal, head of commercial real estate at Bank One, acknowledged that his company would get a cut of the origination fees.

GMAC is a giant in the commercial mortgage business. According to Commercial Mortgage Alert, an industry newsletter, the finance company was the second-largest securitizer of real estate loans in the first half of the year, having contributed $2.3 billion to mortgage-backed offerings, or 8.8% of the total.

Only Capital America, a now-defunct unit of Nomura Holding America, was bigger, contributing more than $3 billion of loans originated in 1998. Nomura shut down Capital America last year after heavy losses. GMAC is also one of the biggest servicers of commercial mortgages, with a $72 billion portfolio.

Bank One is a much smaller player, ranking 27th among securitizers in the first half with less than 1% market share, having packaged only $159 million of loans in securities. It used to originate real estate loans through a joint venture with Orix USA, but this year Orix bought out the bank's 55% stake.

The joint venture was strictly a conduit, making loans only for securitization, which gave the bank's customers "only one option for long-term financing," Mr. Neal said.

GMAC, on the other hand, places some of its loans directly with insurance companies and pension funds. That enables it to give Bank One customers "the best execution in the marketplace," Mr. Neal said.

Bank One has about a dozen commercial mortgage specialists in four states, Mr. Neal said. These loan officers will become GMAC employees, and GMAC will dispatch originators to Bank One offices in the other five states where the bank does commercial real estate business.

Observers said the deal makes sense, given that margins in the conduit business have shrunk, giving an advantage to large originators with economies of scale. "This is a business that has to end up going to the lowest-cost producer," said Stephen R. Blank, senior fellow for real estate finance at the Urban Land Institute.

"The commercial mortgage banking business has been consolidating for several years now," Mr. Neal said. "It takes size to compete, and we don't think it's a business we're particularly good at. Why try to grow something when we can team up with someone else?"

GMAC isn't just sparing Bank One the overhead. It will take on the risks associated with securitization. During last year's liquidity crisis the spreads between commercial mortgage-backed securities and Treasury bonds widened unexpectedly, and many conduit lenders, including Nomura, found themselves saddled with huge inventories of underwater loans that they could not securitize profitably.

In that sense, Bank One's deal with GMAC mirrors arrangements that its Indianapolis residential loan unit has with other companies. Banc One Mortgage originates home mortgages but services them for only a few months, then sells the servicing rights in bulk to two gigantic servicers, HomeSide Lending of Jacksonville, Fla., and First Nationwide Mortgage of Fredrick, Md. The arrangement lets the bank offer home financing without taking on the interest rate risk inherent in servicing.

The latest deal should enable GMAC to grab an even bigger share of the commercial mortgage market, said Charles E. Dunleavy, Jr., president of GMAC's commercial mortgage division. "Because of the relationship Bank One has with the customer, we have a better chance of finding out sooner, rather than later, that the customer is looking for a commercial loan."

GMAC may look for similar partnerships with other banking companies but has agreed not to team up with banks that compete with Bank One, and it will check with the bank before proceeding with any deal, Mr. Dunleavy said.

Mr. Neal said he envisions other synergies between the two companies. For example, Bank One could syndicate large loans for GMAC; it could provide senior debt for deals in which GMAC is an equity investor; and both could participate in interim financings.

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