Former branch of Montrose Mortgage solidifies national CMLS network

What was previously the Ottawa branch of Montrose Mortgage has become part of CMLS Financial Ltd., which calls itself Canada’s biggest independently owned provider of commercial mortgages.

The acquisition, for which the purchase price was not disclosed, was finalized last month. Steve McEwen, David Arntfield and James Scarrow, who were the owners of the Ottawa-based Montrose branch, have been retained by CMLS as vice-presidents of business development.

Asked how things are going so far, McEwen said: “(CMLS) is certainly run like a big company, and we’ve had some adjustments there in terms of being part of a bigger company — a little more structure, that sort of thing. But we’re adjusting well.”

The Montrose Mortgage operation had been operating in Ottawa since 1999. It was a business that, while independently owned, acted in affiliation with the Montrose Mortgage head office in Winnipeg.

McEwen explained the Ottawa office’s role was to facilitate deals for mortgages on commercial and multi-unit residential properties, which would then be administratively handled by a head office in Winnipeg. He said the Ottawa branch has put together more than $2 billion in financing deals over its 13-year history.

CMLS has more than $6 billion in mortgages under management, it said in a recent news release, and does about $2 billion in new deals each year.

Some consistency, some changes

Much of what CMLS’ new Ottawa office will be doing is the same as what it would have been doing as Montrose. However, McEwen said he’s now part of a group that provides direct lending rather than being strictly a brokerage service in which another company provides the loans.

“CMLS is a true mortgage-banking platform. We have a balance sheet to lend from now, which we never had before,” he said. “It’s a hybrid between a direct lender that has one product — for example, a life insurance company or a bank — and a mortgage brokerage which has access to the entire supply side as an intermediary.”

McEwen said his team would remain focused on financing transactions in the “mid-market,” which he categorized as a range between $2 million and $50 million.

Notable projects or building sales the Ottawa branch of Montrose Mortgage helped finance in recent years include the Centennial Towers complex in downtown Ottawa, the Trainyards retail and office complex just southeast of the capital’s core, and the Brookstreet Hotel at the heart of Ottawa’s high-tech district in the west-end suburb of Kanata.

In terms of any changes on the horizon, McEwen said the Ottawa office will become involved CMLS’ entry into the personal-mortgage market early next year.

McEwen also said that, as part of a bigger organization, his team has access to additional resources.

“It’s a bigger company with professional management, HR support, IT support, marketing support and, as I said, some direct-lending products that we never had access to,” he said. “It does strengthen what we can do.”

Gaining the right team in the right market

A primary motivation for CMLS in this acquisition was getting a foothold in the Ottawa market.

“(Ottawa has) always been viewed as a stable market… if not growing,” said CMLS president David Franklin from his Vancouver office.

Getting the right people on board was also part of it, he added.

“What we gained were three experienced commercial mortgage originators with a culture and personalities that fit very well with what we had already in place,” Franklin said.

He said the new Ottawa team was able to “bring their clientele and the market of Ottawa to complete our national platform,” adding to CMLS’ presence in Vancouver, Calgary, Toronto, Montreal and Halifax.

Previous CMLS-Montrose connection

Both Franklin and McEwen said there were occasions when the former Montrose branch and CMLS were competing, but more often than that, they did business together with Montrose putting together deals that would end up being managed by CMLS.

“I would view it as more co-operative than competitive,” McEwen said.

Franklin said the Ottawa office will be given the room it needs to keep doing what it has already proven itself capable of.

“Our culture is to provide our offices with a fair bit of self-management or leeway — a fair bit of autonomy in running their business,” he said. “I do have a regional director in Toronto that oversees the eastern operations… It’s more support and oversight as opposed to day-to-day management.”

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