Not counting this pending acquisition, W&D's multifamily servicing portfolio totaled $51 billion at the end of the first quarter. The net operating income from that portfolio increased 6.4% in 2015, according to its quarterly earnings report.

For the first quarter of 2016, W&D's total servicing portfolio generated over $37 million of revenue, a 13% increase over the prior year. This increase was partly due growth in the servicing portfolio itself, as well as a slight increase in the weighted average servicing fee.

An Important Boost

Indeed, revenue growth from servicing fees and interest income gave the company an important boost last quarter a period during which commercial real estate investors hit the pause button, according to CEO Willy Walker, “slowing down both the financing and investment sales markets.”

“Fifty cents of earnings per share and $32.4 million in adjusted EBITDA during the quarter when total transaction volume was only $2.6 billion, underscores the value of our servicing business,” he said.

A call to Walker & Dunlop was not immediately returned.

BETHESDA, MD–Walker & Dunlop announced Tuesday morning that it is acquiring the commercial mortgage servicing rights of 480 loans in a $3.8 billion servicing portfolio for $45 million.

The seller is Oppenheimer Multifamily Housing & Healthcare Finance, a subsidiary of Oppenheimer Holdings. The loans, which are backed by the US Department of Housing and Urban Development, are multifamily and healthcare loans. The deal, when it closes, will position W&D as the largest multifamily/healthcare servicer in the US. W&D is funding the purchase with available capital.

The acquisition is part of the company's goal to increase the revenue it gets from servicing and other non-transaction based fees, according to CFO Stephen Theobald. W&D made this goal in 2012 and over the years its servicing portfolio has ticked up steadily, he said in a prepared statement. “The opportunity to acquire a portfolio of this size is rare and our strong cash position allowed us to move quickly to accelerate the accomplishment of our goal,” he also said.

Servicing Generated $37M of Revenue in Q1

Not counting this pending acquisition, W&D's multifamily servicing portfolio totaled $51 billion at the end of the first quarter. The net operating income from that portfolio increased 6.4% in 2015, according to its quarterly earnings report.

For the first quarter of 2016, W&D's total servicing portfolio generated over $37 million of revenue, a 13% increase over the prior year. This increase was partly due growth in the servicing portfolio itself, as well as a slight increase in the weighted average servicing fee.

An Important Boost

Indeed, revenue growth from servicing fees and interest income gave the company an important boost last quarter a period during which commercial real estate investors hit the pause button, according to CEO Willy Walker, “slowing down both the financing and investment sales markets.”

“Fifty cents of earnings per share and $32.4 million in adjusted EBITDA during the quarter when total transaction volume was only $2.6 billion, underscores the value of our servicing business,” he said.

A call to Walker & Dunlop was not immediately returned.