Combination Expected to Vault Firm Among Top 10 Largest Commercial Real Estate Lenders and 2nd Largest Multifamily Lender Overall With a Combined $7.7 Billion in 2011 CRE Loan Originations
Bethesda, MD-based commercial mortgage company Walker & Dunlop Inc. is buying fellow lender CWCapital LLC from an affiliate of Fortress Investment Group for $220 million in cash and stock. The combination is expected to create one of the largest commercial real estate
lenders in the U.S., with a combined $7.7 billion of commercial real estate loan originations in 2011 and an aggregate servicing portfolio that exceeds $33.7 billion.
Together, the firms will become the second largest multifamily lender and eighth largest commercial real estate lender in the U. S., based on 2011 mortgage origination volumes reported by the Mortgage Bankers Assn. (MBA).
Under the purchase agreement, Walker & Dunlop will pay $80 million in cash and approximately $140 million in stock, which will make CW Financial the combined company's largest shareholder.
CWCapital is active in multifamily, healthcare and commercial real estate lending with in-house origination capabilities for Fannie Mae, Freddie Mac, HUD, life insurance companies and conduits. Founded in 1972 in Needham, MA, CWCapital originated $3.7 billion of loans in 2011. It has approximately 180 employees and services $16.8 billion in commercial mortgages.
"CWCapital is an exceptional company with an outstanding team and a corporate culture very similar to Walker & Dunlop's," commented Willy Walker, chairman, president and CEO of Walker & Dunlop. "CW's people, credit discipline, and client focus are highly regarded throughout the industry."
CWCapital's CEO Michael Berman will take a senior leadership role at Walker & Dunlop following the closing, expected within the next 90 to 180 days.
Founded in 1937, Walker & Dunlop became one of the first lenders to operate under Fannie Mae's Delegated Underwriting and Servicing (DUS™) program in 1988. In the 1990s, the firm became a major lender to the real estate investment trust (REIT) industry, using cross collateral and substitution of assets in revolving credit structures for major REITs including Charles E. Smith Residential, United Dominion Realty Trust and Walden Residential Properties. In early 2009, Walker & Dunlop acquired certain assets from Column Guaranteed LLC to expand its multifamily lending platform. The firm went public in 2010 and its shares are traded on the NYSE.