WD - Earnings call transcript Q1 2022

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Kelsey Duffey

Good morning, everyone. I'm Kelsey Duffey, Senior Vice President of Investor Relations at Walker & Dunlop, and I'd like to welcome you to Walker & Dunlop's first quarter 2022 earnings conference call and webcast. Hosting the call today is Willy Walker, Walker & Dunlop's Chairman and CEO. He is joined by Steve Theobald, Chief Financial Officer. Today's webcast is being recorded and a replay will be available via webcast on the Investor Relations section of our website. we Relations earnings www.walkerdunlop.com. section morning, to and This Investor the of Instructions] posted release our presentation [Operator our website, slides touch reference Willy a serve some These what of point and during on for will the call. Steve as reference we EBITDA, diluted share note per financial course the adjusted non-GAAP will also metric, the Please of earnings during that adjusted and this call. financial appendix of a these non-GAAP for the reconciliation presentation the metrics. earnings to refer Please of release. Investors language earnings are urged in the carefully statements forward-looking to read our this are Securities meaning which facts, Act be on historical made the Statements XXXX. within deemed call, of may not of forward-looking Litigation statements Private the Reform

as now we can quarterly and risk our filed SEC. describe about do disclaim result future information, or annual no statements materially. to to to of Walker and our otherwise, actual will Dunlop obligation events, the current expressly Forward-looking whether detailed results obligation the reports may so. information our More differ Willy. a expectations any and alter update turn be new under with is call or & in statements, over forward-looking found factors I

Willy Walker

growing Thank form times they markets contributing XXXX. financial rates, our volatility, in innovate dramatically. the brand of our fantastic the our the created and that special brokers spectacular due Walker in Dunlop you, had a technology, I everyone. & everyone trainings morning, years on The key feeling great all-company lightning it has metric clients, growth think business And and and and Dunlop track very first Walker to of we of rapid success. We enterprise. bankers to left to and to X,XXX our and and to the our that at meeting to depths has performance financial Denver hear the Over closing of Walker for executing have to held in Dunlop. long With in & the team. strong continuing throughout over are to of we and part amazing saw celebrate of collective the differentiate end made in growth the standing team I participate and behalf a remarks at which required the people, We pervasive are our transition start strong In something March. marketplace I my have Kelsey, doubt team. inflation Walker market of Dunlop and in the record, higher have QX. and speakers, & equated did every line pandemic, told proactively our in Denver like they a clients crisis good catching to We gathered across an from X of lockdown no bottle. employees in investments almost

Beyond Dunlop brand meeting, our Denver we highlighting also Here". the Starts new and technology people our titled at "Community of campaign Walker previewed &

it in in capital focused In XX% $XX.X billion. to human difference? But market dramatic grew that make inflation our revenues it to XX% we capital up and are talked to before. Due and of can top share I've comparable dynamics first as for per the diluted Dunlop, exceptional what made the ever QX helped launching and acquisition in does investments growth, community why over do? investments we platform navigate evident bottom-line what and led exceedingly sales of work, a XXXX important. be we The considering property environment here, it year-over-year from diversity we do and do, employees. capital why Answering how do underscoring vital aided growth and up drove technology companies growth in on to 'XX. respectively, and landscape, Walker total QX haven't performance rates of million been in our we & past why we volume was XX% the last & make more long what made of & year. about have is what from than transaction is our war, as and capital Total we clients communities This grew investors were past difference, clearly $X.XX, again debt year. Dunlop, For workplace, is where from clients, and have the people was do what when the challenging does XX% transaction play competitive created the earnings XXX%, we of in the Walker and we by which volumes, retention and which a our of year. and the post-pandemic strong starts total once human Walker a CEO hybrid and it do where breadth over is do the We $XXX volume live why, do human allows XX% provides QX brokerage we shop, quarter and the by we why, country. GeoPhy cultivated across services And and why Dunlop the for macroeconomic and and

the the leaving underpin Dunlop's Walker XX% a of growth. which $XXX remainder borrowers their & overall consistent market billion up lend over Fannie 'XX. grew in source Fannie reliable, multifamily of capacity, or XX.X% Technology grew strength remained the a volumes our XXXX share total the Mae Freddie of XX.X% billion Fannie from 'XX, to use multifamily $XX with year. continue has to QX with lending market in to for capital lending will to XX% GSE QX QX, due and our of Our them and to only over

our quarter, the brand During of our Dunlop. with servicing the joint new data our transaction X Apprise expanded people are to of and reflect our points refinancing partner commercial technology company. and venture talented of estate real driving growth a February, closed In loans volume which volumes. XX% in portfolio Walker continued new volume GeoPhy, technology, acquisition wonderful in was combination total on clients our of our and XX% use that to was & we with

As we is and and X up QX businesses GeoPhy to most year. small first the over dramatically XXX there outlined appraisals. earnout the businesses, balance up small lending focused appraisals very originations keep our a grew completion These in technologically during acquisition from million, GeoPhy enabled component on the 'XX significant $XXX of last X XXX% of balance of press team that growing release, quarter will QX with XX% the the

taught combine capital technology to about ton markets new to a markets to and huge they While results, successfully. impact financial these to how enter are X human only have our beginning and businesses have penetrate us

not financing and synergies on research We financing affordable sales as housing. market One integrating the addition facets commitment the Alliant platform The Zelman's for The very of build banking estate. community emerge Walker and of every of starts the we products We into from well best nicely our with quest contributed XXXX. provide housing raised which the see real relationships in transactions companies knowledge Capital with firms we our is properties did be in units focused and and under begin QX single-family the of on in to the acquisition continues of XXXX & Zelman's move work in team very acquisition W&D Walker commercial into ability affordable throughout to in We in the equity clients. the to management our brought both expectations country. expanding spent we place the brokerage the Alliant's Capital the as most country. to it assets bankers capabilities here into Dunlop's $XX commingled between apartment best market to brokers one ex housing banking as & have in partners, our Dunlop's Dunlop debt businesses. growth customer diminish growth X as developing with of viewed important funds to investment and over acquired to investments on should our Zelman, affordable to investment day. and Alliant & affordable remain housing billion capital XXX,XXX where Walker

technology. in what results As moment major position market brokerage investors Think demands the returned property turns investment our housing volume generate for to and leadership over with XXXX. of to we accomplish during attractive. XX%. made do to we we and our meet brought the very heavily when We research, affordable XXXX. XXXX, to wildly service than the debt simply seen our able in then used us in of transaction years And and will offering active QX the the the to financial in We expand be been a yet X market are we've X in past expanded lockdown and HUD pandemic have XXXX rather market, the outperform risk-adjusted acquisitions grow When offering. Fannie before, invested recovery of Freddie service

see And revenues the assuming QX and I ahead. back in so greater acquisitions financial growth we increases XX% in Steve EPS dramatic and and our while turn fantastic. XXXX detail, to generate grow results now truly Steve? what to discuss the is personnel will to over call X discuss current in overhead the due market in QX then to XX% to come expenses environment I'll

Steve Theobald

and good Willy, you, everyone. Thank morning,

market to leverage As a meet quarter able our clients' growth. future in of which we within solid the strong for uncertain we with first and results conditions while Willy financial creating generating to described, started XXXX platform were needs our just breadth momentum

last strength was expenses EPS we offset Growth EBITDA, EBITDA in during continued year-over-year the $X.XX, to in months. to components year-over-year of in X $XX up up increase XX drive the diluted to of million. to growth acquisitions X% XX% while the adjusted revenues cash-generating by which the significant was quarter made First the related adjusted was

working up XX%, from additional naturally This to of per its acquisitions based as grow number the and contribution but resulted in as acquisitions the which our is XXXX volume XXXX. the joint acquisitions $XX.X revenues earnings more on as of Personnel QX EBITDA we noncash due we $X.XX acquisition year once Zelman, synergies and from commissions results share, of growth revenue, Alliant million are expense will achieve the Through our year companies we through nature venture financial originate the to expenses XX% business. the currently earnings per adjusted quarter the due in these Adjusted expense quarter, in scale. and part a the we QX but to platform. XX% are per increased to over excluded appraisal are expect welcome the teams see share added $XXX extremely strong the and have getting quarter. in in of seasonal the flows synergies. for value expense of million quarter was personnel $XX increased of excited this Apprise, the share transactions previous of first GeoPhy, We and $X.XX about was prior These $XX.X nature. the we volume. revenue was of benefits in the quarter. from course million in fully integrate and revalued we planned in percentage and these integrated by personnel first recognition of of our from to in Revenue the net growth the in driven income our in adjusted to quarter the interest transaction earnings and million, onto expense also to GeoPhy Alliant's in begin our the these personnel was resulting also first as QX compared

$XXX you in XXXX, doubled in QX expense Alliant's term year-over-year we assumed securitized recall, increase senior of loan the a the $XXX increase The end debt interest size in $X.X of secured outstanding in the fixed-rate million. As facility our and 'XX. debt of in resulted million at of amount may to million

the term the floor operating a margin so this $X.X from income the acquisition grow rising will which year, QX the time and first We within XX% return offsetting rate expense equity to increases $XXX of within for expected at tied escrow annual should the and our sheet and are XX%. quarter half XX% of to we our target billion on was XX% million the rest year, paying year. and in over point interest to until X second the it is has which locked to quarter. cash the rates While XX% not months we range of was our we loan ended of our for basis this of from interest on the our in SOFR, any range our deposits, balance XX at impact interest QX annual closing see GeoPhy XX% during see bonuses on with after target of company of

past allowed acquisitions XXXX. our us largest are position including of over objectives, financial end a with strategic in acquisition to number our of the that at strong the line XX to close drive has Our in the history year

May filing. flow as in continue a our sales provide and included and support income dividend XXXX, dividend research shareholders into the quarter's impacts going and ongoing our increase are we stock the asset We our servicing, our as our lending, in treasury of corporate Zelman, new share, per our and quarterly This services asset management, Alliant community presentation, payable end, included we financial any recurring to XX, development with which transparency are new tax syndication, valuation are acquisitions, services brokerage, reflect now we'll XX-Q the of other with credit segment. acquisitions, are Markets financial performance GeoPhy the investment Directors of the streams, reflects financial revenue capital the earnings proprietary Capital segment release corporate and presentation housing to even growth generation dividend. management operating recent now opportunistic in and structure well to including consistent and of believe forward. repurchases. servicing property To our updating reporting is segment. last With the cash and more debt more our Infrastructure in segment. our disclosures overall of low Agency included to $X.XX that of investment a payments as initiatives yesterday, approved record and Board included

XX increase the and segment The overall $XX segment last fully revenue that QX from $XXX net segment GSE for income to million, we year, with in Fannie was due last with 'XX billion. Zelman income brokerage the and by made the of the and of generated was combination XX% in markets the year-over-year teams, have to due XXXX caps down year-over-year $XX ended addition in management, the total This million people, due just have grow due the a $XXX to the up of to first volume volumes Servicing net in a with which and $XX and million up the benefit volumes. EBITDA $XX quarter for decline and first income million the our includes continue continuing the brand the as from The for led year in $XX.X compared combined to For up from $XX transaction which XX% increase fee of to expect QX was income total of our our in billion total year-over-year hit are strong company generated increase We remainder already million a in small XX% average total of the million. volume March billion our personnel debt were Alliant and 'XX Asset should investments of of I transaction was December billion new venture. $XX quarter, personnel hire and weighted volumes net financial $XXX of and sales volume pipeline expectations Blackstone of in and GSEs million origination including property XX% our up expense, in origination $XXX to Mae Capital from revenue both grow growth X% continued strong up sales joint XX% under a first Markets XX% of commissions capital volumes. 'XX. basis team year. lending quarter, end expense points property balance quarter by in volumes July Management in up revenues servicing up The technology volumes, adjusted of benefit total increase of assets WDIP $XX their The and from during million, and brokerage primarily $XX earned down mentioned. We the QX net large performance quarter a primarily million, Alliant we QX XXX%, of which, at debt XXXX, primarily for QX increase. and year, with servicing our portfolio, growth in XX, to agency to

from of $X.X During adjusted prior the strong segment overall generate X.X recurring XX-year $XX revenue, of quarter, benefit its resulting last million compared year This look of million $XX a million X.X the provision From nature. Since be is due from portfolio segment and the basis in business year. And $XX.X this consistently to EBITDA allocated corporate a perspective, adjustment. XX% our first basis to segment, in metrics calculated typically QX, Finally, the revaluation to our income to $XX it historic primarily negative. adjusted good. the benefit rate $XX the to million, loss million extremely Corporate cash-oriented of EBITDA will points our EBITDA majority declined overhead credit should from an provision net the to quarter really apprise points, contributed generated of continue up million in in of compared

to ability are plan income XX, to & this more join the in into new the about in $X new putting our overall headcount $XX part take to capabilities the meet that share. we segment hope Drive net of market with prior hear $XX allowing of our during our clients' market needs the million year, the excludes our deeper same the 'XX. the have uncertainty, segment benefited hold financials. our Walker to provide Day us which adjustment business clients their We our last Investor first. transaction negative And We the period diversified structure and Dunlop will was to reporting an on May for year. million during and our detail all more compared of Apprise dive of valuation a company. to and volumes reputation was negative $XX the of Adjusted impact compared long-standing negative from first needs which as For the platform, segment you this period a to in to million EBITDA, growth million increased has a initiatives us negative due grow of broad can quarter, for on

and quarter, even second uncertain the into and our needs advice move will we vital. more for best market service be conditions remain As the clients'

a of And we have of predict for year. pipeline Thank can to and business over time strong a of call our have achieve QX. We and growth Willy. none the this for the full business now for EBITDA earnings morning. the double-digit expect future, I'll resilient you while diversified us back model built and to turn goals your

Willy Walker

Steve. you, Thank

dive will X. I changes outlook, Before outline major at our effect like that Walker on take & I'd into briefly to Dunlop management X June

that ahead pleased move and is As Walker Steve's stepping Chief Dunlop Dunlop of businesses and to due small while Steve and someone skills have accounting in many job years, acquisitions & Steve have cost operational just simply investors Florkowski with the Greg extremely the feat, into smaller and drive I am KPMG prepared successful team, leadership an running Walker we that. to for exceptional company Greg I'm Dunlop's With and business & their asked roles, that our now all new am the do Zelman, a the Greg after lines is Officer. new and has TapCap, in XXXX. become to Walker as the masterful is joined I drive and billion When to And track serving Greg role. efficiencies knowledge a management and Dunlop GeoPhy. annual Financial past goal record confident suited CFO we role, to In in company. new XXXX And is of Dunlop done in been also X know, of including in development #X and of finance by to from of $X XX% to XXXX of this and will & growth, ideally as financial XXXX, achieving for an place on and have Alliant dramatic We leadership underlying exciting Chief grow spades. need Steve savings Steve's to role Steve his This XXXX. Steve's AKS, goal. the confident and and And XX% in objective much I joined no with revenue & ambitious identify possesses are Walker product integration realize Officer. on beyond. management quarter Theobald first our 'XX and Steve, pace growth Steve in our Drive The throughout revenues Operating has of that and to in & the in XXXX, we well of Steve Walker were

the generate Another Drive to earnings of 'XX share. $XX goal per is to to $XX in

in As exploded, rights fees, while XXXX, investors as GAAP onetime replaced cash EPS grew X%, the just year. charges servicing brokerage growing X In Steve highlighted, 'XX, impacted and XX% EPS. revenues with we as on positively QX saw mortgage EBITDA noncash earnings from

growth earnings growth income. percentage a real market, a that as Inflation ramp household from all-time of XX% the is of our in is the EBITDA outstripped affordable the notably that and growth. our and become many hikes and services demand our But commercial maintains continue larger down continue it end high single-family fundamentals an in used will they the we earnings rate So revenues expectation did new industry estate XX%. to down average cash-generating XXXX at have in housing in created EBITDA the from and where our stock of technology-enabled have the XX% and and rates of someone strong as Europe, Despite more war historic XXXX. larger America both same to rising making is That only rates emerging median contributors it significant of underlying to of housing potential to growth. inflation, become earnings and earnings revenues as said, at before. to seen With have scale not and businesses earnings, our that we we grow outpace our

commercial to debt on, with capital CMBS Banks properties the and real most Case-Shiller years. to new pandemic and commercial several and As prices rent growth it the throughout while uncertainty statement exception we the The solid average the in the real and market supply-demand is trajectory the pricing few year-over-year months, an where market driving growth of overcapitalized of very both And even advantage volatility over the in go to that of estate, assets upward equity recent over wildly with will owning one rates interest in tick renting securitized of to continue their are with growth capital become American life from more pour next and expensive. Mac, that continued The collateral report allows up capital estate. XX% for source limited debt same to home where ability markets of companies. rates that saw is into due the is lending, a the next are seeking Mae area securitization. supply lend weakness GSEs hard financial to amount very even multifamily as originate it scale And global to exists generate for and imbalance rent capital pandemic. the Fannie slowdown, today and of in times insurance system is be Freddie should important, makes consistent them

billion beginning XXXX. raised QX. largest of estimates billion REITs, SREIT BREIT frequent the and side, that X real to And at had $XXX $X.X the funds powder commercial and waiting $X be of the deployed Blackstone's Starwood's dry U.S. On estate billion, in respectively, private into equity

real is abated, something the course guide to Over the rates an year, finally interest deploy estate these has Dunlop's to rates. assets multifamily volumes real it asset our that classes coming over to for rate the financial over XXXX. are believe capital transitions. as much estate the capital seek assets clients will years. market and disappeared from in commercial demand we moves capital is transaction the not and digest responsibility long-term, in chasing interest seeing and flows cap Walker that economy, so determine the quality of pricing take that The had it time various results we the they the but With will our disparity & inflationary not may commercial of remain The albeit healthy market between asset, drive during

looks it is QX QX. while currently this point, no half of project when pipeline we XXXX any depth the X QX is sitting difficult previous particularly pandemic, to back debt the sales robust of that's different XXXX were like transaction of Our over with the increase what a projected at XX% in our the headed. year, across from and visibility in volume markets to platforms, the where in And had

as As we will to XXXX, share risk companies our close did back. with in and the to exposure larger continue continue credit international we'll clients, remain our grow lines market we'll to W&D team broader and pull innovate, to markets, business

advantages larger several have competitors. over We our

team. Steve when annually. when economy, our took Mae top-performing crisis to in GFC, throughout the that culture. they time due into only held felt with management know a the down Mac the any Walker of swaths an IPO Dunlop, W&D's U.S. they this Dunlop with financial Fannie follow XXXX. had business terrific Smith company is people, I model the the on leverage questions. line large & that clients the Denver Howard the I exceptional to the in to we went in conservatorship Theobald and performance multifamily and the word grateful corporate throughout of yet to forbearance March. ran company financial and webcast decoupling. a great Freddie our of a in few lead success the grew pass-through the transaction of for spoke Thank our the a X,XXX a government day ability scale and our brand whom we they team. this dramatic we at and Yes, Kelsey W&D XXXX, joining for of now dramatically firms, in in small Yet And working I'm December government and W&D to long exceptional in results of culminating success if finish continue financial competitors great market and Walker a have and our volume joined we positioned capital were team class W&D with end the granted morning. insured would the technology all loan But to us the and at open real larger the great strategy off mortgage over an to having and were We in growth, commercial of combined focus, work a our HUD we and and debt each will truly is estate any deeply our & community volatility, to every brand industry while of focused having of didn't and to the the out. call we've largest centric Freddie a U.S. very of the in And history, nearly turn relatively Dunlop's hard would the the investment exceptionally sales Dunlop's XX% company. Fannie, provider are But have team world are our day, word for is of economic industry, rents is we We've in successfully later, that It inflation hedge is We brand immune asset to had to company. place And you cycles to truly XXXX. for to building returning of the best means handle & this members had any brokerage month and the I hundred were hobbled by know the make Walker the share & a professionals of to created pandemic place and allow an the the and economic and Walker work W&D and Walker many and employees are bondholders. that get fallout talented have. warehouse XXXX, at pandemic. the grew meeting we by honor with largest amazing all from And gaining that but exceptional by want businesses, in multifamily competitor with follow culture, at the advent due team. originated I the word employees, become industry. to would line out. never payments well by to and growth no is the many move

Operator

of Instructions] [Operator Rahmani question coming Jade KBW. Our from is first

Jade Rahmani

rents if are has XX%, Clearly, wondering the rent space investors? was especially in transaction from new about lease up extremely for strong particular above you multifamily you in growth markets. I the What volumes. in could many strong been hearing outlook with talk

inflation addition, costs is an remain In as construction high. extremely overhang

So replacement decade, probably costs real are last commercial many rising, yet multifamily record and darling sectors class over the has the rates. exhibit the estate asset low been of cap

investors talk variables the just So please to those triangulate you that and tone could seeing? of you're

Willy Walker

Jade. aspects a that of you Ivy Chris some went had Walker I of, quite yesterday we multiple if with where Aaron Mickelson, question, on will, webcast Zelman, into and Appel detail sort

price family. summarize clearly would affordability a with some single-family single rental about needed I there's the what market, they being and concern think between in from the as housing adjustment as prices of that market. versus being that the high gap the That single-family discussion are of I affordability is

As previously, is as right accurately a in people of described, we rent said housing. rental And lot you unprecedented growth keeps now.

to the then allow should to to getting also difficulty a properties for supply build supply, during multifamily with across is of and underscore because supply and in the very the continue we're pandemic, that far the in labor slowdown of little there lagging help dynamics materials new the the fact which And inflation board rightfully imbalance, seeing you grow that cost trend. and above so rents building as as supply-demand new

we in we in so right Jade, his our of the extremely as my now credit the QX market. feel Steve from above a an standpoint, comments, from And said that mentioned I what overall QX. script volume is did standpoint, about XX% pipeline And good part in

position. financing debt well side amount as are activity as on very, So significant the market and investment seeing on a our we of feel the very sales good about side both

Jade Rahmani

the believe, grew, around personnel company's this quarter in overall Notable expense the picture, Regarding growth XX% earnings platform. I year-on-year.

all the of mentioned acquisitions. You

think we with items to any the they weren't what note, increased consistent personnel we about earnouts, Were the relative expense revenue be to ratio to first in there should payments charges, capabilities in mentioned saw any perhaps or unusual quarter. You expense onetime housing. but the any commission-based affordable

Just $XXX wondering in number. that items unusual if expense there's any personal million

Steve Theobald

this I’ll unpack try Jade, to bit. is Steve. Yes, that a little

So a lighter so of volume thoughts. One, perspective. couple a from historically, you QX, as is know, transaction

of And they’re the really commission the the their of through particularly origination rates investment we working quarter cases. splits, typically, lot sales during their until team or side. and that’s have on commission so at third not high And in side, our still some end second a

of in the get Given volumes team we max percentage to strength the splits of our origination a earlier say, a, the year. QX, in much higher I’d their had

think seeing of have rate we a we’re that’s QX volume a historically. a function overall I higher than just commissions generating quarter-to-quarter as in that really you’re the So seen on would not basis

as transactions looking just we there associated onetime in other going in beyond the part accrual, company expected of the that’s Two, expense, as would expenses think underlying transaction is forward. $X.XX had carryover the expenses than performance it higher then little of have And accrual the with professional So QX, based been personnel a at than higher the between GeoPhy because relative Alliant some the of just to were well of from otherwise we the would typically on bonus given transaction accrue there it. company results, we otherwise. the budget. I the have fee earnings, And

Operator

Delaney question comes Steven from of next Our JMP.

Steven Delaney

good that laid you working X congratulations also, you've first, on forward a obviously like the need with in to school the both of to the we about I on but roles. your segments, new out more. May way XX, Look promotions. Well, to And Steve Greg go news their to and little

So year-to-date, $XXX Fannie talk if that leave pricing starts to let's then a follow-up and you are where days. about just million. and year-end rates compare it up we that. Freddie now, we XX-year then on also thank bit up little with mortgages financial And with a conversation come there the their and you permanent I'll back opportunity. loans for for interest -- today, maybe every if resi that Can XXX conversation got these Willy, can,

could of today? cost that of kind give us the just agencies -- a of you the If credit sense at

Willy Walker

say would first XX% in Freddie you that those of volumes QX in And with volumes. annual will this, and there put to forth, see I say Fannie pleased also I their was the the our as can only we a I from numbers guess, used quarter. allocation But were, I lot work generate QX. of

And rest so of year. a capital the the tremendous they've got amount into going of

The the of is used data that to there to it as relates be soon will of other that's Freddie rest thing that's affordability. rest will step-up now. of how in Fannie country, of the be up distinctly scored scored it's the for income year average keep in AMI because coming out to that new the calculate lot across believe imminent. a median from Steve, mind and And I year, the the is until lending been

QX. somewhat I as into QX, And And both have so say affordability been on as like their change do the that. of they're quite out and is, will then frustrated about completely market at times versus QX, we need would believe felt we've of that move final focus thing rate the just as much them to I market

always they get volumes to As they come do, win that and to to. and need business the get in they back

rates dollar both And space use so for multifamily they are in I use to new appointing would reiterate that would difficult. and that XXXX, that Freddie of that Freddie Freddie of would who I we as fully limited a within markets Mac leader the also CMBS and said taking XXXX. new the say every Fannie but allowed comes is the day and where around just not theme to they is is securitized was a see of Debbie to the very capital it someone big yesterday I from debt. very, has only totally to competitor final pleased the left had multifamily, securitized and a needed, of Freddie previously, role. while And huge agencies. Steve, huge platform volatility, Markets XXXX funds had then very, XXXX and since Mac world low not been the different. thing banged have leadership was a move, Mac, that multifamily, Jenkins say, debt has were a head I it's move before because very we're expect

you VIX steep, very, debt know, are unless curve Fannie is very Mae or Mac. well and you it's up. Freddie difficult is ridiculously forward to The As securitized price

consistent remain will capital and of volatility. And throughout Freddie, market a throughout cycles so Fannie source as always they do, and

the given feel and Fannie quite quarters about we dynamic. the good role so market Freddie play in And will coming that that

Steven Delaney

amazing to brokerage business accommodate sales transaction-based your investment heavily You're you've built and and that.

wants if interest is And I guess private rates something of that property price Do there sales. to owner And that You opposed mini a to that drive a new as we'd expanded a necessarily as rates with transaction mentioned scenario going owner there. an product. of But property cap that as has I equity. that specifically be will And that cap in slowdown every be in extend that his rates Bridge require the perm what wants. a rate multifamily I'm & reflects $XXX billion property of a call higher, there get thinking a think obviously think to cap you the kind that he investor to sales, period. develops property just allows about loan step a could Dunlop Walker whole negotiation like

Willy Walker

property I is the be and there male who thing selling are So properties. that first would both will say female owners

be. it would So

Steven Delaney

I apologize.

Willy Walker

Not at would say on just the Steve, not to wanted that And I second this. that, thing at all, all. I is out. point then that

million to grow investment $X.X in in seen, – from XXXX. sorry, of ‘XX billion XX.X% in XXXX sales $X.X team XXXX transaction As to volume our you’ve

done have market brokers and every fantastic We the best a very, we’ve And has in very leading best and very team of that I in job done the by built, Mickelson it believe, country. finding the Chris going effort.

of So think will in not Dunlop competitors. I & do impact Walker degree to sales, investment if the see it larger our that a it we some impacts slowdown

We have a focused more team.

much We of team. team larger we a presence the our have a market have much size and smaller for

slowdown as point be see. would relates any we to that So it one

their I in multifamily of amazing think say saying owners to properties that able I realized have property to appreciation comment, in an be is your to properties. the you’re aren’t only thing type return for like would say that of get. get of have that properties had their going would run to would The they owners second you selling incredible I and

so there if capital honestly, quite are capital the markets; not a and result, buying who are seeing rates price. watching very today, then get will that a upon there much price system right deploy. of they’re now, rates. is are And now, Steve, they reliant leads That sellers And good cap is very, as a and so they are into that the in debt to they have b; lot a low a; buyers at extremely cap that because right we cash

are capital going leverage there. the $XXX And given I out not billion that because there not of equity that seeing back bad firms billion so is acquiring raised debt clearly has capital cost in when the number levels private a we they’re to of that out amount or are $X.X of up people thing said that’s properties, high And on there. significantly. QX, quite BREIT What honestly, massive the the that so gone Blackstone amount is to equity a equity

it relates plenty And as to piece So deals services we’re then doing are XX%, on and that new meet XX% the of final LTV market. to the products acquisition. the

watched an meets for enough product know I – it. will of fact, for that market a time, you period Steve. If to is we create long a us opportunity think a I demand, us do there you’ve for a

Operator

comes of Coffey question Wedbush Henry next Securities. from Our

Willy Walker

Henry, yet. you we can’t hear

Operator

yourself unmute Henry, now. you to need might

Willy Walker

There you go.

Jay McCanless

McCanless Henry. is Jay This on for

we're we've had I But look question do multifamily the the guys rates and hand, rental you single-family. at on that yesterday webcast very one about transaction In starts, you discussion growth. 'XXs. level know hand, for highest your rental the could at a first on if I have, the good I good think then what be But does to that since seen volumes. other So

So going lot to take of will it's absorb. product but of a on supply hopefully, you I that's would loans coming your and to be brokering of to on be the all love to market, market get guys amount it, the for

Willy Walker

right development historic to now I number from that up XXX million. about, is about run right which rate what, XXX,XXX a think million that now, are of XXX units is under

I elevated, point that other the while to not think So delivering tomorrow. it's is

on XXXX, seeing relates a XXXX and offset interest we're through this that it landscape. on be very it's so year economic rates. in rent hopefully this as XXXX to new to and moving focused going And when arrives And growth transition supply dramatically different

yesterday next saw this We basis the said, gotten doing meeting basis we're we and out And at XX as off the came through with period. raising I when will hopefully rally points XX points table. today, the Chairman think in and markets Powell taking the we're

go that, The of right the to completely is we when not exceedingly that surprise be well. are to It getting today, be this is But delivered. with as labor saying, be. going are possibly that period it was that delivered, to of the the to on is it's it now sponsor, painful rate happening with the our got my $XXX will while clients this units here. can X be given sense through do are is But there second issue And Fed result right to where is being crisis going yesterday, debt a there going loan then et as now, is on a agencies, that, in at as and costs and great normal where financial leverage it big to about by transparent what's a obviously, that depending Dunlop something, transition where career, things to as everybody. there thing "Oh, looping period. cetera. X when knows new level, in and cost market But cetera, people sitting be we those $XXX of big in -- my to was today. The through Steve's 'XX. somewhat & $XXX managed One surprised a a the that we've the I to crises relates comments, was Walker get supply least depending those don't highlighted is get question And think I pandemic well, a it my And is things. everybody. the given exceedingly transition thing I as the surprise pricing delivered fixed et to is loan, is back XX-year it it supply It's One, right on in rate now, 'XX challenging. work to with delivery cycle like fixed

Jay McCanless

wanted your onetime this all to but pick nature promotion, expenses Steve, the of of us these And of congrats at from quarter. some so on

SG&A run the we component much SG&A, you've understanding going a guess, just new a that but businesses? Just there, of what brokerage of, got a expect about thinking I variable how core forward should addition the rate with

Steve Theobald

onetime the super in And the range million would question, kind opportunity QX I'm I excited the Yes. of expenses, say, for here. think $X million of about I in are your terms to if that's $XX look, helpful.

Jay McCanless

in underwriting other housing to we've addition question, similar negative land. the effects what if to types forward? be GSEs? or going housing could And then going including seen be so the so, of positive on been Mae Have to my are by the they recently allowing Fannie moves expand and transaction next their start for seeing assets, part underwriting realizing box affordable that WD And manufactured in the you guys homes

Willy Walker

the moving from is development, reasons our why of it's if but focused a still They're will, the deal mission. from their standpoint, affordable exceedingly on on valuable lot standpoint. financial beyond deal one Alliant strategic a view product and in not a an new you only Not or very the

lending was balance their XX I Fannie, by basis yesterday small business on it lowered rates who think points.

that we GeoPhy Remember, small feel balance the technology is extremely and about into lending, on dominated entry us it's make space multifamily the of the good half half by together put team banks. our it, that. the and focus market so And that's and the and acquisition

our so technology of team, and runway a there. And focus, we with with our with lot have brand our

everywhere. in I the that overcapitalized the sit underscore So now, and think and type banks are I while wildly them to and in around any banks, I are think assets my competitors, as right chasing now, on volatile big about about typically chasing they lend happens comments right did versus W&D markets what of to

to So in the a there's say opportunity going and market to our But that continue fierce exceptional, I competitor. be absolutely market is that to would that on grow exceptional. focus

sort into any agencies wouldn't I the So new just expect agencies, now. to of products the go right back to

that focused loan I in will AMI is on you a market once also a they're doing think about how as be this But if it allow which AMI on we've think through. growth. I rate, lot competitive huge the have AMI on numbers levels will roll going them seen come markets in change concerned, of are we'll to affordability see number they the where less impact every out to will, the obviously and be big

that has so a one of got of are those And markets is types rent AMI or happens staying gone like up, low. in an the you've cap your rates great things Austin Nashville growth, but begrudgingly that

to a back buyers that's But because hard Henry's what right to amount on the little bit cash get market capital now the that And levels to looping it's question. like, so sitting and buyers we're is and leverage the dominating sidelines. leverage borrowers low of seeing of

Jay McCanless

an higher answer a then as sales environment were on hard more XX% sales market The look purchased? Last guess, also to and/or I was basis, you a maybe one to, kind much just one, how I of very out was And in some this the permanent the into stock organic versus rate setting, I property quarter their Could that hedge of for in moving X-parter themselves a -- this know through XXX% think transaction assets? has gain of and historically increase assuming set impressive is that in driven exposure me. break property volumes gain volumes. we're maybe but that as

Willy Walker

transaction question on all QX. GeoPhy organic and that’s So didn’t X, add because volumes to Alliant in

done. And question, rising and there’s that’s organic from, interest I that in ‘XX that, that investment believe, growth. here transaction growth. that the part of financing none of total was from rates, there is that then we’ve that sales all as question, volume on volume, your But So to a That’s the volume. of relates it second acquisitions QX team that’s added comes all

products large I of But the our firms because countercyclical students When rate space think one investors bunch dislocate, you size sit and did buildings portion also, with are up really growth, that in as grow as rate business and we to if volume markets and revenue and selling W&D, specialty we because other and very of using when to we seniors XXXX, don’t other out ability that’s we moving numbers. in and that that seen have get, business our products. this have have well. agencies brokerage this market is markets specialty as the very, solid in put have scale of that they have will, continue that it the is that things as to washed to capital relates scale market we well play at a like and

And through going move so what’s it’s project standpoint very which happen from go we is exactly said volume to I’d a that what this just back previously, as year. to to difficult I

is settle halfway the trying as volatility that And say I We’ve really sellers just we’ve been quite low but to well. deployed difficult able capital movements stay But think market. honestly, into amount low very April week, happily to and rates the be grudgingly cap week. for seen down. relates the would of rate things over last week about it last for the through last investors, and price rate to I for of

don’t invest see think start up we’re so very I and in will move I people we rates gets understand to volatility, of see it’s And to to its market. because going then in levels think I a do this this looking it market the again. transact as just is what then rise, think not cap rates to capital that of to important gets amount And precipitous

Operator

We this at time. other have questions no

for So it over I'll closing Willy remarks. back turn to

Willy Walker

excited at seat new joining Great. and for to everyone will is W&D. those role Steve of It and who a earnings Steve, with on his questions next working of pleasure Congratulations you COO. roles for to Steve years me. in quarter day. would with And Greg doing of different thank But super I'm Thank I today. a huge to everyone I X been wish for fantastic a had you calls you your is all us their thank Steve continue in new X.X in us role. It's Greg and when us. be as

Steve Theobald

everyone. you, Willy. Right back Thanks, at

Walker & Dunlop (WD) 5 May 222022 Q1 Earnings call transcript