After 73 years as a family company, Walker & Dunlop is entering the public markets and is now trading under the ticker symbol “WD.”
The Bethesda, Md.-based lender held its IPO yesterday, offering 10 million shares and expecting to raise between $105 million and $111 million when the dust settles. The company plans to use some of that capital to execute its growth strategy, expand its stable of originators, and add a new debt program to its toolkit.
“You’ll see us grow our origination capabilities and our origination sales force significantly,” says Willy Walker, whose grandfather, Oliver, founded the Bethesda, Md.-based firm in 1937. “We’ll add staff to our eight offices across the country through either just hiring individual producers or acquiring smaller mortgage origination shops.”
A prolific agency lender, Walker & Dunlop offers the trifecta of Fannie Mae, Freddie Mac, and FHA loans. In 2009, the company was a top 10 lender for all three agencies and logged about $1.7 billion in multifamily volume for the year. And that momentum has carried it through 2010: The company had already exceeded $1.7 billion through the third quarter of this year.
While agency executions will continue to be the focus, the infusion of capital from the IPO will enable other programs as well. “We’re looking at potentially doing an interim loan fund for really good borrowers that we know well,” Walker says.
The company plans to earmark about $125 million next year for the interim loan program, which would be a six- to 12-month execution. The program would target assets that might need a little more seasoning before achieving that 90 percent occupancy threshold to qualify for a Fannie Mae or Freddie Mac permanent loan.
Walker & Dunlop also opened its CMBS shop in the fall and has about 10 life insurance company relationships on its menu. And as the yield on the 10-year Treasury continues to rise, with all-in rates from the agencies rising in concert, the company sees more opportunity for private-sector executions next year.
As recently as 2007, about 40 percent of the company’s multifamily debt volume was through its CMBS and life insurance company platforms. “I see it going back to that kind of a mix over the next couple of years,” Walker says. “As rates come up, I’m quite certain that both CMBS and life companies will come in and start to compete.”
While Walker will remain chairman, CEO, and president of the company, focusing on managing and growing the various platforms, the IPO marked the end of an era at the company. “This company was founded by my grandfather, it was run by my dad for his entire career, and yesterday we sold the company to the public,” Walker says. “There are huge opportunities ahead of us, and we feel extremely well positioned for the future.”