Walker & Dunlop said on Tuesday that it has completed its purchase of CWCapital. The completion of the deal, which was announced back in June, makes Walker & Dunlop one of the largest commercial real estate lenders in the United States. At the same time, it illuminated the role that Michael Berman, CWCapital’s CEO, will play now that the acquisition is complete.
The purchase price was $234 million—$80 million in cash and $154 million in Walker & Dunlop stock that was issued to an affiliate of Fortress Investment Services. CWCapital was previously a subsidiary of CW Financial, which is owned by funds that Fortress affiliates manage.
“This is a fantastic deal for Walker & Dunlop and CW Capital,” Walker & Dunlop chairman, president and CEO Willy Walker said in a prepared statement about the deal. “In 2007, Walker & Dunlop embarked on an ambitious five-year growth plan that has included two major acquisitions and the company’s IPO. Our success has driven Walker & Dunlop from the 45th largest commercial real estate lender in 2007 to the 8th largest following this most recent acquisition.”
Mr. Walker’s assessment of the new firm’s size is based upon combining the two firms’ sizes as reported in the Mortgage Bankers Association’s 2011 rankings.
Walker & Dunlop also said Tuesday that Michael Berman, CWCapital’s CEO, will now serve as executive vice president of Walker & Dunlop, where he will focus on Government Affairs through the end of 2012. There was no word on what happens then, and Mr. Berman didn’t return a call seeking comment.
However, he said in a prepared statement that he believes “the two teams will work exceedingly well together, increasing the strength of the already incredible platform Walker & Dunlop has in place.”
Mr. Walker said that CWCapital would add substantially to that platform. “The increased loan origination volumes and financial wherewithal this acquisition provides accelerates Walker & Dunlop’s progress toward becoming the premier commercial real estate finance company in the United States,” Mr. Walker said.
Much of that activity will be focused on the New York tristate area. Mr. Walker told The Mortgage Observer in June that a large presence in the area was crucial for anyone wanting to be a “significant player in the multifamily space.”
Update: A Walker & Dunlop spokesperson confirms that Mr. Berman will stay on in his new role through December 31, 2012. His main focus in the 4-month role will be to assist in the merging of the two companies. He’ll then leave Walker & Dunlop to “continue his public policy work, as well as participate in the commercial/multifamily industry serving on, and consulting with, select corporate and non-profit boards.” Future plans also include teaching real estate finance and policy on the graduate level.