Walker & Dunlop Launches CMBS/High-Yield Lending Platform

Walker & Dunlop and an affiliate of a fund managed by Fortress Investment Group have entered into a JV to form a CMBS lending platform that will provide financing for multi-family and other CRE properties nationwide.
Tim Koltermann

Tim Koltermann, of Walker & Dunlop

Walker & Dunlop Inc., of Bethesda, Md., and an affiliate of a fund managed by Fortress Investment Group, New York, have entered into a joint venture to form a CMBS lending platform that will provide financing for multi-family and other CRE properties nationwide, Walker & Dunlop announced Wednesday.

The JV will be named Walker & Dunlop Commercial Property Funding L.L.C. and will provide first mortgage loans on all commercial property types and also originate high-yield whole loans, mezzanine debt and preferred equity.

Headquartered in New York, the venture will be overseen by Tim Koltermann, senior vice president and group head of CRE originations and operations for Walker & Dunlop. Koltermann has 25 years of experience in commercial loan originations, CMBS trading, loan pricing and structuring, and CMBS securitization.

“This new initiative with Fortress Investment Group allows us to leverage our scaled origination, underwriting, servicing and asset management infrastructure to offer an alternative capital source for all commercial real estate asset classes,” Willy Walker, Walker & Dunlop’s Chairman & CEO, said in a release.

In August, Walker & Dunlop raised its first large-scale, institutionally backed debt vehicle, focused on multi-family and seniors housing bridge loans and has been deploying that capital ever since, Jeff Goodman, earned value professional of Walker & Dunlop’s proprietary capital group, noted in the release.

“The addition of this CMBS and high-yield platform … is a terrific step in the continued expansion of Walker & Dunlop’s product lines,” Goodman said. “We expect to issue loan applications as early as January 2014 and are projecting an initial origination target of $1 billion in the first year of operation.”

“Our venture thinks that the CMBS business is prime to grow,” Koltermann told Commercial Property Executive. “Walker & Dunlop’s experience in originating multi-family (loans) will allow this new venture to originate more than our fair share of multi-family, which in combination with a diversified pool will provide exceptional risk-adjusted returns for the business.”

Before joining Walker & Dunlop, Koltermann served as senior portfolio manager at PineBridge Investments, where he was responsible for all trading, investment, research and risk management for a $300 million CMBS portfolio. Previously, he held senior positions at Longacre Fund Management, Bear Stearns and JPMorgan Mortgage Capital, where he was responsible for CRE debt investments including CMBS trading and other alternative CRE debt products.

Earlier in his career, Koltermann worked for JMB Institutional Realty in portfolio management, acquisitions, dispositions and development.

He earned a bachelor’s degree in business from the University of Wisconsin–Milwaukee and an MBA in finance and economics from the University of Chicago’s Graduate School of Business.