BETHESDA, MD--As far as multi-billion-dollar deals go, Walker & Dunlop's acquisition of a $3.8-billion servicing portfolio couldn't have closed more smoothly than it did this week, executives say.
At the start of the month, the company announced it was acquiring the commercial mortgage servicing rights of 480 loans in a $3.8-billion servicing portfolio from Oppenheimer Multifamily Housing & Healthcare Finance, a subsidiary of Oppenheimer Holdings.
The multifamily and healthcare loans are backed by the US Department of Housing and Urban Development and their acquisition by W&D position the company as the largest multifamily/healthcare servicer in the US.
The original price for the portfolio was estimated to be $45 million, but that was prior to the July payments borrowers were set to make on the loans between the 1st and the 15th. After that, the loans will amortize down and any payoffs would need to be taken into account.
There was one payoff so the purchase price ended up at $44.6 million, CFO Stephen Theobald told GlobeSt.com. The period prior to closing went smoothly with the usual flurry of calls from borrowers to see about the account transition, he said.
The loans in the portfolio have a weighted average note rate of 3.99% and an average age of 44 months, with the average remaining life of the portfolio loans 31 years. Given the relatively low average note rate and remaining maturity of the portfolio, W&D expects limited prepayments of loans over the coming years.
Walker & Dunlop's HUD servicing portfolio is projected to exceed $9.3 billion at the end of Q2 2016.
BETHESDA, MD--As far as multi-billion-dollar deals go, Walker & Dunlop's acquisition of a $3.8-billion servicing portfolio couldn't have closed more smoothly than it did this week, executives say.
At the start of the month, the company announced it was acquiring the commercial mortgage servicing rights of 480 loans in a $3.8-billion servicing portfolio from Oppenheimer Multifamily Housing & Healthcare Finance, a subsidiary of Oppenheimer Holdings.
The multifamily and healthcare loans are backed by the US Department of Housing and Urban Development and their acquisition by W&D position the company as the largest multifamily/healthcare servicer in the US.
The original price for the portfolio was estimated to be $45 million, but that was prior to the July payments borrowers were set to make on the loans between the 1st and the 15th. After that, the loans will amortize down and any payoffs would need to be taken into account.
There was one payoff so the purchase price ended up at $44.6 million, CFO Stephen Theobald told GlobeSt.com. The period prior to closing went smoothly with the usual flurry of calls from borrowers to see about the account transition, he said.
The loans in the portfolio have a weighted average note rate of 3.99% and an average age of 44 months, with the average remaining life of the portfolio loans 31 years. Given the relatively low average note rate and remaining maturity of the portfolio, W&D expects limited prepayments of loans over the coming years.
Walker & Dunlop's HUD servicing portfolio is projected to exceed $9.3 billion at the end of Q2 2016.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
