Bethesda, Md.,-based Walker & Dunlop has bought the loan origination and servicing platform from Irvine, Calif.,-based Johnson Capital, giving it another large acquisition.
Walker & Dunlop Chairman and CEO Willy Walker told Multifamily Executive that although he had worked with Johnson Capital, headed by CEO Guy Johnson, for “eons,” talks had only really begun over the last few months. Walker valued Johnson’s long-standing brokerage relationships with many life insurance companies, banks, and CMBS conduits.
“It grows us in a lot of important strategic ways,” Walker told MFE.
Johnson, an approved HUD MAP lender and Ginnie Mae issuer, will provide $590 million in HUD servicing to Walker & Dunlop’s $40 billion servicing portfolio. While Johnson has sourced billions of dollars of Fannie Mae DUS loans as a correspondent to Walker & Dunlop over the past 20 years, it has sourced Freddie Mac loans through life insurers.
Johnson Capital has originated $1.3 billion in commercial loans on average over the past three years, which also provides a growth opportunity for Walker.
“Johnson Capital has a significant origination presence in the West and Southwest and will grow Walker & Dunlop’s brokered originations with life insurance companies, banks and CMBS conduits dramatically,” Walker said in the press release. “Commercial loan refinancing volumes are projected to grow over 70 percent between 2014 and 2015 and adding the origination capabilities of Johnson Capital to Walker & Dunlop is both timely and strategic.”
Walker thinks his company’s public platform can help Johnson’s existing originators around the country. “We believe we can make Johnson Capital’s originators that much more effective and that much more productive,” he says.
In the release, Walker also said that he looks forward to “working with Guy over the coming years to achieve Walker & Dunlop’s mission of being the premier commercial real estate finance company in the United States,” which would indicate that Johnson is staying on in the new arrangement.
Though terms of the deal were not announced it is expected to close around Nov. 1. Walker said this won’t be his company’s last addition. In a competitive commercial lending environment, Walker & Dunlop regularly competes against Wells Fargo, Goldman Sachs, and a host of other heavyweights. In that environment, Walker has to keep growing.
“The ability for us to continue to grow is massive,” Walker says. “There’s a lot of stuff left to do.”
