Layoffs have been reported at Fairstead, a fast-growing affordable housing developer and owner, and Walker & Dunlop, one of the nation’s largest commercial real estate finance and advisory firms, in recent weeks.
At Fairstead, a group of employees were laid off in mid-February and then a second round occurred earlier this month, according to a former worker, who spoke on the condition of anonymity.
The ex-employee estimated that about 100 people have been laid off between the two rounds, but Fairstead did not discuss numbers. Instead, a spokesman cited the company’s recent growth and opening of new offices.
“2022 was the company’s biggest year of growth, and we have a higher head count than we did a year ago,” said the firm in a statement. “As our portfolio grows across the country, now with communities in 28 states, we are adding top talent to our vertically integrated team and expanding business lines while making realignments to match current and future business needs. This is a reality of any high-growth company. We recently opened two new offices in Colorado and Florida, where we are hiring and have more than 40 open positions.”
Fairstead also has offices in New York, Maryland, and South Carolina. The firm had approximately 725 employees and owned approximately 20,000 affordable housing units at the start of the year.
One ex-employee said February’s layoffs came as a surprise, taking place shortly before the company was to give annual bonuses. Sources also said the company has resisted paying unused vacation time owed to laid off employees.
The Real Deal also recently published a story regarding Fairstead.
Walker & Dunlop (NYSE:WD) announced that it reduced its team by 110 employees, about 8% of its workforce, April 17. The move was “in response to continued challenging conditions in the commercial real estate financing and services market,” according to a Securities and Exchange Commission filing.
“We held on to our entire team entering 2023 thinking that commercial real estate transactions would recover once the Federal Reserve stopped raising rates,” said Willy Walker in a letter to employees. “Unfortunately, with the Fed still raising rates, and the market disruption caused by the recent bank failures, we simply don't have visibility into when market activity will return to normal and must take action.”
He said the company remains committed to all of its business lines.
Walker further noted that there is a great deal to be optimistic about, saying the firm is the largest government-sponsored enterprise lender and second-largest Department of Housing and Urban Development lender.
According to the chairman and CEO, 80% of its lending and sales activity is in multifamily. “And while the current market is challenging, other commercial real estate asset classes, such as office, have far deeper problems. We are fortunate that our strategy and growth has been predominantly in the multifamily industry,” he said in the letter.
The company said it will provide further details regarding the workforce reduction during its May 4 earnings call.