A ‘Competitive Furnace’ Burns Inside Willy Walker
He had always wanted to chart his own path and lead a major, global corporation, and in those days, his father’s mortgage banking company was nowhere near that scale. The firm had worked out of a single office since his grandfather founded it in 1937, and at the time Willy joined, it employed 23 people.
As he stepped into the office that Monday morning to assume his role as chief operating officer, he saw that his father, still CEO, had vacated the corner office for him, a gesture that signaled a transition was beginning. His father also ceded the head seat at the conference room table, allowing Willy to run the company’s 9 a.m. meeting.
“I did not run that first meeting very well,” Walker said.
He didn’t know the client relationships, the deals the company was working on or even the right questions to ask. But he did know one thing: He wanted to grow Walker & Dunlop into the corporate giant he had always dreamed of leading.
“I had an immediate desire to transform the company so that no one could ever say ‘Willy just inherited this company and stepped into his father’s footsteps,’” Walker said.
“If I had to look back and do it over, I probably would have been a little slower to make change, and I probably would have been more solicitous for input from both my father and the other people who had helped make Walker & Dunlop what it was.”
Today, Walker & Dunlop employs 872 people across 40 offices. The mortgage finance firm, which was the top Fannie Mae lender in the country last year, is traded on the New York Stock Exchange. It had a market capitalization of $1.2B when the market closed Thursday.
Walker is the largest shareholder in his namesake company. He owns 1.28 million shares, a stake that was valued around $50M this week.
Walker, who became CEO in 2007, has not only turned a third-generation mortgage bank into one of the country's top commercial real estate finance firms, he has positioned himself as a leading voice of the industry. He uses his close relationships with national politicians to shape policies to what he believes is best for real estate and the country at large.
During this economic crisis, that voice has been amplified with a new, national webinar series called Walker Webcasts. Some of the programs, which feature Walker’s insights and speakers like Starwood CEO Barry Sternlicht, Carlyle Group co-CEO Glenn Youngkin, J.P. Morgan Asset Management CEO Mary Erdoes and Amazon executive and former White House Press Secretary Jay Carney, have drawn more than 10,000 viewers in the suddenly competitive webinar market.
The weekly video sessions have gone beyond business updates, tackling questions of emotional intelligence and leadership that have shown the personal side of Walker and his guests.
“People are desperate for ways to think about the life they’re living today,” Walker said. “They’re desperate to have someone talk about emotional intelligence, and how to talk about your feelings, and how to deal with teenage kids who have all been cooped up in the house for seven weeks.”
Those who know him personally describe Walker as someone with an intense competitive drive that has brought him success in his business dealings and his athletic pursuits, such as finishing fourth in a national triathlon competition and running the Boston Marathon in 2 hours and 36 minutes. He has spent his life obsessing over numbers, whether race personal records or stock prices.
But as he has grown older, Walker, 52, said his competitive edge has softened. His friends say his desire to win has extended to those around him, and his frequent congratulatory letters to friends and colleagues have left them amazed and wondering where he finds the energy.
“Willy is fueled by this competitive spirit. I’ve never seen it before,” said Andy Florance, the CEO of $24B data giant CoStar Group and Walker’s longtime neighbor. Florance sat on W&D’s board of directors from 2013 to 2016.
“Willy has got more energy than 20 people, and it’s driven from this competitive furnace, but he wants everyone to come with him,” Florance said.
‘He Probably Doesn’t Ever Sleep’
Before Walker turned on the camera for his first webcast, he had already transformed his means of communicating with W&D’s hundreds of employees and clients.
As soon as he moved W&D to working remotely, he turned what was previously a weekly email update to the staff into a daily email, then he pivoted to a daily video that he would film and send to his employees.
“It was immediately evident to me that when we moved to a disperse work environment, that communication was going to be extremely important, and more important than almost ever before,” Walker said.
While his company has grown exponentially since he took over, Walker still tries to hold on to the spirit of the family business that his father and grandfather presided over before him. He sends personal notes to each of his employees after they close a deal worth more than $5M, and he also sends written cards to each employee on their birthday.
At one point during two hours of Zoom interviews with Bisnow, Walker moved his computer camera to show the stack of birthday cards on the living room table of his Colorado home. He said he has some catching up to do on the cards, and he has had to adjust to mailing them to each employee’s home address rather than their office.
“His ability to continue to maintain our company’s identity and culture has been unbelievable,” said W&D Senior Managing Director Brendan Coleman, who joined the company in 2007, the same year Walker became CEO. “The most impressive thing about Willy over that period of time is that he hasn’t changed. He’s as accessible now as he was when we were just 75 people in Bethesda. He probably doesn’t ever sleep.”
Walker brings the same personal touch to his relationship with the company’s clients. While he had grown accustomed to traveling every week to meet with clients, the shift to videoconferencing has allowed him to sit in on more meetings.
He said he has met virtually with 30 clients over the last three weeks. His personal style of management helped the company close the largest transaction in its history during the pandemic.
In January, Walker flew from Denver to Northern Virginia to meet with Southern Management CEO Suzanne Hillman, whose company was looking to bring on a firm to help it refinance a 22,000-unit portfolio of 67 multifamily properties. His meeting helped W&D land the assignment.
Last month, W&D’s Coleman-led team closed on a $2.4B credit facility for Southern Management with Fannie Mae.
“There is no doubt that differentiated us from the competition,” Walker said of his meeting. “I’m not sure whether the CEOs of Wells Fargo and CBRE showed up. I know the CEO of Berkadia showed up. But those CEOs, while they’re incredibly talented people, they’re hired CEOs. Their names aren’t on the door. Their family didn’t build the firm.”
Wedbush Securities Managing Director Henry Coffey, an analyst who covers Walker & Dunlop, said he sees the company as part of the top tier of commercial real estate finance companies, along with Wells Fargo and Berkadia. He attributed the company’s growth to the smart decision-making of Walker and his fellow executives, and he said the CEO has shown strong leadership during the crisis.
“Continuing to keep the business moving forward and closing on the largest transaction in the history of the company in the middle of all this is impressive,” Coffey said. He added that Walker typically shows up to meetings himself rather than sending a staffer, and his leadership style has been critical to the company’s success.
“There is nothing subtle about his persistent engagement in the culture,” Coffey said of Walker. “It is very present in the business.”
Beyond Walker’s personal touch, he has shown he is willing to be vulnerable and put his personal trials on public display.
At the company’s annual meeting in 2017 in Sun Valley, Idaho, where he brings together the firm’s top investors and clients, Walker kicked off the conference with an emotional discussion about his marital challenges, his struggle with anger management and his journey to be a better father, rather than one who let out his frustrations on his three sons.
In the 25-minute speech, which the company recorded and posted on its YouTube channel, Walker revealed he and his wife, Sheila Ohlsson Walker, separated in late 2015.
“Over Christmas vacation in 2015 we finally said, ‘This is done, we’re split,’” Walker said in the speech. “We went back to Washington in January, and what I would call the mourning process began for me — the mourning process of losing my life partner in Sheila, the mourning process of losing my nuclear family, the fear of telling my colleagues and friends that my relationship had failed. That was a very low time for me.”
Walker said he then read a book that changed his life and saved his marriage: Taking Charge of Anger by Robert Nay. After reading it — at his wife’s suggestion — he connected with Nay, who also happened to live in the D.C. area.
Nay helped Walker address his anger issues that he said had metastasized throughout his life, from snapping at Transportation Security Administration agents in the airport to yelling at his sons when they were late getting ready for school.
As he worked to address these issues, Walker began to repair his relationship with Sheila, an applied scientist of behavioral genetics at Tufts University and Johns Hopkins. The two had separated, but never divorced, and they started dating again in November 2016. Walker flew her to the Bahamas in April 2017, got down on one knee, pulled out the same engagement ring he had given her nearly two decades earlier and asked her to marry him again. She said yes.
Looking back on this experience in front of 300 of his colleagues in July 2017, Walker said he was thankful for three things that happened during the separation: that he agreed to read the book and address his anger issues, that he and his wife always treated each other with respect and that they prioritized their children.
“We always put our three boys first. Always,” Walker said. “That kids-first approach made it so that whenever the personal things started to act up inside either one of us, we thought, ‘What’s in the best interest of the kids?’ And that helped push everything else aside.”
The personal speech had an impact on Walker’s friends and business acquaintances in the audience, said John Rice, a nonprofit CEO who sits on W&D’s board and has known Walker since they were children.
“It was pretty compelling,” Rice said. “I’ve never seen a public company executive bring together the personal and the business in front of your most important peers and clients like that.”
“It was very unusual, but powerful and appreciated,” Rice added. “It had 300 executives leave the conference not just admiring him more, but also it enabled them to be more introspective about who they are as people.”
The Walker family in August moved from D.C. to Denver, where Willy and Sheila first met. Walker said he has taken a morning walk with his wife every day during the pandemic.
Coronavirus: A New National Stage
After Walker began recording daily video messages for his staff, he decided he needed a new way to communicate what he was seeing in the fast-changing market to an industry that was hungry for information.
He first came up with the idea of hosting a video series for clients in which he would share his observations on the market and provide a glimpse into W&D’s deals.
He brought the idea to W&D Executive Vice President of Marketing Susan Weber March 13, two days before the Centers for Disease Control and Prevention recommended canceling large gatherings.
“I said, ‘I can pontificate about what we’re seeing, but it’d be really helpful to add a macroeconomic view to what’s going on in the world,’” Walker said.
To bring in a global perspective, he invited macroeconomic strategist and Milken Institute Senior Fellow Komal Sri-Kumar, who predicted a mid-2020 recession in January on CNBC. The two held the first episode of the Walker Webcast series five days later.
The first webinar drew 1,500 viewers, a number Walker largely attributes to Sri-Kumar’s appearance. March 26, he hosted Peter Linneman, an industry veteran and the founding chairman of the real estate department at the Wharton School of Business. That webcast drew a 4,000-person audience, and another 5,000 have watched the recording on YouTube.
He then began to go through his proverbial Rolodex to land longtime friends and colleagues such as Carney, who worked with Walker’s mother at Time Magazine covering the White House. He brought on Youngkin, a classmate of his at Harvard Business School. He also brought on Erdoes and Sternlicht, who drew a live audience of 9,000 and has received 13,000 YouTube views.
The webcasts haven’t been limited to question-and-answer sessions about commercial real estate. Walker said the interviews that have received the most positive responses have been the non-business topics, such as his conversation on emotional intelligence with Yale professor Marc Brackett and his discussion on leadership with Harvard Business School historian Nancy Koehn.
“I think these webcasts have taken off because it’s not just me sitting around talking about lease rates or collection rates, it’s a broader perspective of what you have to take into account as a real estate executive if you want to be making the right decisions for your business,” Walker said.
He spends hours doing research and coming up with questions for his guests before turning on the camera in his office. He typically wears glasses and a button-down shirt, often with the top button open, and he sits in front of his office's window with a view of downtown Denver. (In October, he paid $9M for a mansion in the city’s Cherry Hills Village neighborhood, Denver’s second-priciest single-family home sale last year.)
“Willy, who I always knew was wise and smart, turned into a very admirable chat show host,” Sternlicht wrote in an email to Bisnow. “He is well prepared, obviously knowledgeable, asks insightful questions, and most importantly, keeps the conversation going. I already suggested we do a talk show together.”
The webinars have helped W&D expand its reach and bring in new business. He said the company’s email list has grown from 19,000 to 120,000 people since starting the webinars. The webinars have also drawn more than 200 audience questions each, and W&D has executives send email responses to those that were not addressed in the webinar, a practice he said created new relationships and business leads.
“This has overwhelmed us,” Walker said. “We never thought we would have this kind of reaction.”
Rice said he thinks the webinars have drawn large numbers of viewers because they go beyond business and show the personal side of each executive.
“Willy is the perfect person to orchestrate that,” Rice said. “The fact that those have been so successful captures who he is: great insight, thoughtful analytics, personal stories always with a little bit of fun, and then leading into business insights.”
‘There’s No Reason I Can’t Fly To The Masters On A W&D Jet’
This is not the first economic crisis for Walker & Dunlop.
The company was founded in Bethesda, Maryland, during the Great Depression in 1937 by Oliver Walker, Willy’s grandfather, and Laird Dunlop. The duo started off by using Federal Housing Administration insurance to make single-family home loans. Walker & Dunlop remained a small, private company for more than 60 years before the co-founder’s grandson decided to join the family business.
William Mallory Walker, a graduate of Saint Lawrence University in upstate New York, had initially wanted to be an investment banker. But as he graduated in 1989, his parents urged him to take a job offer with the U.S. Ambassador to Paraguay, who was a family friend.
“They said, ‘You can always go to Wall Street, but you can’t always go to Paraguay at the invitation from the U.S. ambassador,’” Walker said.
Walker stayed in Paraguay for three years, dipping his toes into the microfinance, nonprofit foundation and environmental conservation worlds. He remains conversational in Spanish to this day.
After his stint in Paraguay, he enrolled in Harvard Business School. Walker said he had offers from McKinsey, Bain Capital, Credit Suisse and Morgan Stanley upon graduation, but he did not want to sit behind a desk, and he turned those down to move back to Latin America. He started out working for a venture capital firm in Santiago, Chile, before becoming general manager of an airline startup and then working for private equity firm Newbridge Latin America.
His next move was to global call center operator TeleTech, where he led the Latin American division before moving on to run the firm’s operations in Europe. He had recently married Sheila, and the two moved to London. But from there, Walker realized there was no more upward mobility for him at the company, as the CEO had no plans to leave, and he only owned a small stake.
As he looked to move back to the U.S., his sights landed on the mortgage finance company in Bethesda with his name on it.
He remembers speaking to a Walker & Dunlop board member at the time who was shocked to see the CEO's ambitious son thinking about joining the family business. The board member had said he thought Walker wanted to lead a large company that would allow him to fly a private jet to the Masters Tournament.
“I looked at him and said, ‘There’s no reason I can’t fly to the Masters on a Walker & Dunlop jet,’ and at the time he looked at me like I was from outer space,” Walker said.
Nearly a decade later, he chartered a private plane to fly the company’s executives and clients to Augusta, Georgia, for the 2012 Masters, and he sent that board member a picture of the jet.
Soon after joining the family business, Walker began to execute major deals. In 2006, he raised money and took on debt to buy out W&D’s largest investor, AIG, which had previously owned 49% of the business.
After that deal, he began looking for other investors to either buy a stake or acquire the full company. He said he felt W&D was still too small and being part of a larger enterprise would give it more resources to grow its portfolio.
In 2008, he reached an agreement to sell the company to Morgan Stanley, Walker told Bisnow. He said the negotiations, which have not been previously reported, were in the fifth round of a purchase and sale agreement when Bear Stearns collapsed in March 2008, sending the financial market into a tailspin and killing the acquisition.
“On the day that deal blew apart, that felt like the worst day of my life, because the market was tanking and they walked away from the deal,” Walker said.
A Morgan Stanley official confirmed the bank had been in discussions to buy W&D, but declined to comment further.
There were moments during the beginning of the Great Recession when Walker thought his company might not survive. But after the federal government took over Fannie Mae and Freddie Mac, allowing W&D to continue closing deals with the agencies, he realized he could shape the crisis to his benefit.
Walker made two big bets during the Great Recession. The first was acquiring Column Guaranteed, a 33-person subsidiary of Credit Suisse, in 2009. The all-stock transaction gave Credit Suisse a 35% ownership stake in Walker & Dunlop. The second bet was his decision to take his company public in 2010.
The gambles paid off, as Walker & Dunlop has grown rapidly over the last decade into one of the largest commercial real estate finance companies in the country.
After bringing in $88.8M in revenue in 2009, Walker & Dunlop began trading on the New York Stock Exchange Dec. 16, 2010, at $10 per share. “Off we go,” Walker told the Washington Business Journal at the time.
The company’s revenue has increased nearly tenfold in the decade since. It brought in $817M in 2019, and its stock price reached as high as $79 per share before the coronavirus began to tank the markets in February.
The company’s growth has continued this year. W&D hired an Austin, Texas-based property sales team that previously worked at HFF Jan. 13, and less than a month later it announced the acquisition of New York-based AKS Capital Partners, a 15-person company made up of former JLL debt brokers that has financed over $50B in debt and equity deals.
Walker & Dunlop in February acquired Columbus, Ohio-based MSF Real Estate Capital, a company that services $925M in life insurance company loans.
Earlier this month, Walker & Dunlop released its Q1 earnings, boasting a record $234M in revenue, up 25% from the same period last year. The company’s share price, which had fallen to $25 during the worst days of the pandemic-related market sell-off, rebounded to above $40 in the days after the earnings release.
“Walker & Dunlop has a very long history in this business, but under Willy's leadership it has grown both organically and via acquisition in ways that are really impressive,” Mortgage Bankers Association CEO Robert Broeksmit said. “They have certainly extended their scope and leadership in this business significantly since Willy took over.”
‘What’s Pushing You To Do This?’
Walker used to check his company’s stock price not just every day, but nearly every hour.
The constantly fluctuating number represented a public-facing metric of the company’s success that Walker said showed him whether he was losing or winning on any particular day.
That all changed last year after Walker enrolled in the Hoffman Process, a weeklong retreat in California. The retreat, founded in 1967, bills itself as helping participants remove negative behaviors, moods and patterns of thought to make positive change in their lives. For seven days in January 2019, Walker had no access to his phone, the internet, television or any other type of media.
“Toward the end of that week I said, ‘You know what, my stress level has just materially transformed by not checking in on where Walker & Dunlop’s stock is,’” Walker said.
After he returned from the retreat, he promised himself he would only check the firm’s stock price once every quarter, allowing himself to view it two days after each quarterly earnings release. He even went as far as to have colleagues redact the firm’s stock price from documents on which it appeared, and employees would apologize after accidentally mentioning the price in meetings.
“For that first month, I was like an alcoholic trying not to pick up the beer,” Walker said of his efforts to avoid looking at the stock price.
But he said he has stuck to the commitment, even over the last three months as the coronavirus roiled the stock markets. (W&D traded at $39.56 pershare as of Thursday’s market close.) Walker said ending his habit of checking the stock price has made him a better CEO. He said he has also made an effort to mature in the other arena in which he competes: athletics.
A three-sport high school athlete and college lacrosse player, Walker began long-distance running when he was living alone in Paraguay in his 20s. He ran the Boston Marathon each year he studied at Harvard Business School, and in 1995 he clocked his best time at 2 hours:36 minutes, a pace of under 6 minutes per mile.
When running wasn’t enough, he trained in biking and swimming and began competing in triathlons. He pushed himself hard in 2011 as he trained for a national triathlon competition, waking up each day at 5:30 a.m. to ride his bike and then working out again in the evenings, all while running a public company and raising young boys.
The work paid off. He finished fourth in his age group at the national competition in Des Moines, Iowa, earning a spot on the five-person podium.
But as he looked out at the crowd of strangers, with no one having come to cheer him on, he couldn’t remember why he had cared so much about the triathlon to begin with.
“I had one of those incredibly eye-opening moments, like ‘What are you doing this for?’” Walker said. “You’re not going to go back to the office on Monday and tell everyone at Walker & Dunlop that you came in fourth at nationals. It’s like, you did this, yeah it’s great for yourself, but you don’t need another medal to put around your neck. Like, why are you doing this? What’s pushing you to do this?”
After that moment, Walker said, he lightened his training regimen and began riding his bike just for recreation. But when he invites a friend to join him, he still can’t help pushing to beat them to the top of the hill.
“Plenty of people will tell you I like to be the fastest out there, and I don’t like losing to people on climbs and that kind of stuff, that’s just my general competitiveness,” Walker said. “But I’m not nearly as preoccupied with being the fastest or strongest as I used to be.”
Rice, who attended St. Albans School with Walker, said he hasn't seen a change in his old schoolmate’s desire to reach the top in athletics and in business, but he has seen him change how he interacts with people.
“His evolution around competitiveness is that, as we all age, he’s gained an increased appreciation for seeing other people win,” Rice said. “He’s channeling his competitiveness even more through enjoying watching other people win.”
Walker’s appreciation of those around him achieving success has extended to his CEO peer, Florance, who for years lived next door to Walker in D.C.’s Cleveland Park neighborhood. Florance said Walker has followed CoStar’s stock price closer than he does, using the larger company’s market value as a measuring stick. (CoStar trades at $644 per share today.)
When CoStar Group first reached $100 per share in 2013, Florance said Walker sent him a bottle of Opus One — a Napa Valley wine with bottles ranging from $200 to over $2K — to congratulate him on the milestone.
“He will compete with me for market cap, and it’s competitive, and he’s using it to motivate himself,” Florance said. “But he’s genuinely happy for me that it’s going well.”
‘We Are Now Sitting At The Table’
Walker & Dunlop’s growth has earned the CEO an audience in national political circles. He sits on the board of the Mortgage Bankers Association, and he has developed relationships with Washington insiders that allow him to help shape policy.
In 2017, he met with then-House Speaker Paul Ryan to discuss tax reform. He rode bikes with former Secretary of State John Kerry and worked out with former D.C. Mayor Adrian Fenty. He is close friends with Virginia Sens. Mark Warner and Tim Kaine, and the son of Maryland Sen. Chris Van Hollen worked for W&D as a financial analyst. Next week, he is scheduled to host Colorado Gov. Jared Polis on his weekly webinar.
“Willy’s ability to build relationships on Capitol Hill and to make a fact-based — not Walker & Dunlop-specific, but industry-focused — argument for why X, Y or Z is smart or not smart for the country and the real estate world, his ability to play an active role in leaning in and arguing on behalf of the commercial real estate industry has been an important part of the company’s success,” Rice said.
Broeksmit said Walker was closely involved last year in the industry’s lobbying effort that led to the Federal Housing Finance Agency implementing new caps for Fannie Mae and Freddie Mac, allowing each of them to spend $100B over a 15-month period.
“I’ve seen him interact informally with elected representatives in a way that shows he has personal relationships with them,” Broeksmit said. “That means they will take his call when an issue is percolating, which is really one of the most valuable parts of Willy’s engagement.”
Walker has also been an active political donor. From 2004 to 2019, he contributed to at least 38 political campaigns, including 36 Democrats and two Republicans, according to a Bisnow review of Federal Election Commission filings. His contributions have totaled more than $160K. He declined through a spokesperson to comment on his political activities.
Walker’s influence has given him a leg up in responding to the coronavirus that he didn’t have during the Great Recession, he said.
“Nobody wanted to talk to me back then,” he said. “I was nothing. I was a gnat.”
Now, he said he is having frequent discussions with policymakers and regulators to get a sense of what type of relief the industry should expect — and to shape Walker & Dunlop’s strategy accordingly.
“Because of our growth, because of the team at Walker & Dunlop and our success, we are now sitting at the table,” Walker said. “It makes a huge difference in what we can and can’t get done.”