Fleet Sees Deal Balancing Risk in Commercial Realty
Hochstein, Marc, American Banker
In commercial real estate, the two big Boston banks have served many of the same elite clients, so Fleet Financial Group's acquisition of BankBoston Corp. may not broaden the customer base.
Instead, Kenneth J. Witkin, managing director of real estate finance at Fleet, said Wednesday that the deal is seen as a way to offer more services under the same roof-and to reduce the concentration of risk in Fleet's portfolio of real estate loans.
In recent years, BankBoston has focused on corporate lending to publicly traded real estate investment trusts. Fleet is a big REIT lender, too, but its lending has been more skewed toward traditional project loans.
"We have always been looking to have more of a balance of institutionaltype real estate business in our portfolio," Mr. Witkin said.
BankBoston also brings to the table its investment banking subsidiary, Robertson Stephens, which would let Fleet offer equity underwriting services to its REIT clients-"something we don't do today," Mr. Witkin said.
He said it was "not yet determined" how the real estate department at the new Fleet Boston Corp. would be organized, or whether layoffs would be necessary.
"That is a process that is going to take shape over the next 12 months," Mr. Witkin said. Fleet's real estate department has 200 employees, BankBoston's 75. …