Walker & Dunlop, the parent company of Green Park Financial, has merged with Column Guaranteed, a subsidiary of Credit Suisse Group, effective immediately.
The merger will combine Green Park and Column into a new entity, named Walker & Dunlop, creating one of the largest multifamily lenders in the business, and the largest independent multifamily lending shop in the nation.
Walker & Dunlop, already a top Fannie Mae lender via Green Park, will now have a Freddie Mac and Federal Housing Administration (FHA) license courtesy of Column—and those licenses couldn’t have come at a better time. The government-sponsored enterprises are expected to continue their domination of the multifamily market in 2009, and the FHA has seen a wave of demand in the last few months as other sources of construction financing have dried up.
“It creates a broader platform and each execution has its strengths,” says Howard Smith, chief operating officer and executive vice president of Walker & Dunlop. “I think we’ll be real disappointed if Walker & Dunlop doesn’t have a $3 billion year this year.”
In 2008, Green Park originated about $1.2 billion in Fannie Mae debt, the fourth straight year the company had more than $1 billion in production. When factoring other capital sources from Walker & Dunlop, such as life insurance companies, pension funds, and conduits, that figure nears $2 billion. In 2008, Column originated about $805 million of Fannie Mae, Freddie Mac, and FHA business combined.
With the FHA license now in hand, Walker & Dunlop will build out its seniors lending and health care production. The company recently hired former Sunrise Senior Living exec Douglas Bath to run its seniors housing and health care lending platform, which will include loans for skilled nursing, assisted living, independent living, and hospitals through its agency programs.
Walker & Dunlop added 33 employees, including six seasoned loan producers, through the merger and now has a head count of 123. The merger also gave Walker & Dunlop office locations in Atlanta; New Orleans; Plano, Texas; Walnut Creek, Calif.; and New York.
The family-owned Walker & Dunlop, founded in 1937, sees a big opportunity this year as other capital sources recede. Many banks are still struggling to dig out from losses related to subprime mortgages and will lessen their commercial real estate exposure in 2009 as they grapple with balance sheets bloated with commercial mortgage-backed securities and construction financing exposure.
But Walker & Dunlop’s independent status gives it a competitive advantage in today’s market. “We’ve stayed exactly who we’ve been, and we’ll have our day in the sun right now without a lot of the issues that our competitors have,” says Smith.
Credit Suisse will own a minority interest in the Walker & Dunlop and will have two board seats. Terms of the deal were not disclosed. Kieran Quinn, president of Column Guaranteed, will assume the role of vice chairman, and William Walker will be CEO of the new entity, headquartered in Bethesda, Md.
The deal had been in the works for about a year, according to the company. Column was looking for suitors since early 2008 and accepted Walker & Dunlop’s bid in July 2008.