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Blackstone Subsidiary, Walker & Dunlop Form Short-Term Loan JV

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The world's largest real estate owner and one of the country's most active lenders have joined forces to form a new entity targeting short-term loans for apartment buildings.

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Blackstone Mortgage Trust, a subsidiary of Blackstone, and Walker & Dunlop announced Tuesday they have entered a multifamily bridge lending JV to originate and finance multifamily loans. 

The JV will target assets prior to their eligibility for permanent financing. Walker & Dunlop will contribute 15% of the JV’s equity capital, and Blackstone Mortgage will contribute 85%.

"We’ve known Blackstone for quite some time, they obviously have a very big name in the private equity world and in the mortgage REIT world,” Walker & Dunlop CEO Willy Walker told Bisnow Tuesday morning. “We saw an opportunity to work together in a space [where] their size and scale and our access to deal flow seemed to provide a win-win.”

W&D currently has $311M in loans on its balance sheet, and this JV will give the firm the opportunity to scale that to more than $1B, Walker said. Blackstone Mortgage Trust CEO Steve Plavin said this JV will boost the REIT's investment volume.

“Walker & Dunlop’s market leading multifamily and agency loan footprint makes it an ideal partner for us as we seek to help borrowers bridge their financing until an agency take out,” Plavin said in a statement.

W&D is one of the nation’s largest nonbank originators of Fannie Mae, Freddie Mac and U.S. Department of Housing and Urban Development loans. Last year, the firm bought a $3.8B portfolio of federally insured debt from Oppenheimer Multifamily Housing & Healthcare Finance, for around $45M, making it the largest HUD multifamily/healthcare servicer in the country.