Credit Suisse First Boston has folded its once high-flying real estate lending unit into other parts of the company.

The move is the latest in a series of steps by the investment bank to rein in the unit in the wake of the financial markets' meltdown in late 1998.

A company spokesman said most of the real estate products group's 150 employees - the ones who originate and securitize commercial mortgages and trade the securities backed by such loans - have been moved into the fixed-income division.

Bill Adamski, the realty unit's chief investment officer, resigned last week. The group's remaining top executives - Mark Finerman, managing director of securitization; David Loo, head of origination; and Edward Santoro, chief operating officer - are to report to Jack DiMaio, co-head of the credit products "cluster" in the fixed-income division.

About 40 employees of the real estate unit were moved into the investment banking department. These employees advise real estate companies.

The real estate unit was originally named the principal transactions group; it was founded in 1995 by Andrew D. Stone, a maverick real estate financier.

Under Mr. Stone's leadership, the group became a top real estate lender, making several billion dollars of often risky real estate investments with the firm's capital.

The liquidity crisis of late 1998 prompted First Boston to rein in the unit. Last April, the company changed the unit's name to the real estate products group and put managing directors Stewart Dauman and Karen Zimmerman in charge.

Mr. Stone was relegated to the title of chairman and took on the role of liquidating the real estate portfolio.

He left the firm in November after a much-publicized row over his compensation. Last month, Mr. Dauman and Ms. Zimmerman left to start their own company.

First Boston's real estate strategy now is to focus on originating loans that can be securitized and to avoid taking long-term risk, a spokesman said.

Credit Suisse First Boston was ranked 12th among commercial mortgage securitizers last year, having contributed $1.5 billion of collateral to bond offerings, according to Commercial Mortgage Alert, an industry newsletter.

In 1998, it had been No. 2, having securitized nearly $8 billion.

The spokesman declined to comment on published reports that the real estate group last year took a $250 million reserve against potential losses.

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