Walker & Dunlop has provided $464.7m in Freddie Mac loans to New Senior Investment Group for the acquisition of a 28-property senior housing (independent living) portfolio spread across 21 US states.
The 28 individual, 10-year, fixed-rate, CME loans — with five years interest-only, followed by a 30-year amortization schedule — were made through Freddie Mac’s Seller/Servicer Program.
The properties were sold to the sponsor by affiliates of Holiday Retirement, the second largest operator of seniors housing in the United States, who will continue to manage the properties post acquisition. The properties are most heavily concentrated in California, Florida, North Carolina, and Oregon.
Walker & Dunlop last year grew to become the #1 Fannie Mae Delegated Underwriting and Servicing (DUS) and #3 Freddie Mac Program Plus lender; and so far this year the company has completed more than $1.2bn of seniors financing.
“Walker & Dunlop established a strategy to grow our seniors housing lending business dramatically in 2015,” said CEO and chairman Willy Walker.
A 45% jump in year-over-year loan originations to $3.5bn in Q2 helped Walker & Dunlop report record earnings and revenues; but while the agency lending business has thrived, its CMBS business has only survived.
The firm’s Fannie Mae and Freddie Mac businesses each originated $1.1bn in Q2, while its CMBS joint venture with Fortress Investment Group meanwhile originated just $275.8m during the first half of the year.
“We earn more on the originations that go through the agencies because we take more risk and get paid throughout the life of the loan, whereas on the conduit we take the risk [up front] then sell,” Walker told Real Estate Capital earlier this month. “We need to continue to grow conduit, so there is a piece of me that says I want $1bn [per year] so I would prefer that deals go to conduit,” but agency originations are “worth more to us from a purely economical standpoint.”
CME multifamily loans are typically offered on more favorable terms than Freddie Mac’s standard portfolio loans, entering a pool of loans from that the government-sponsored enterprise then sells off to an institutional investor.