Walker & Dunlop Investment Partners Closes $157.5M Multifamily Debt Fund

Walker & Dunlop Investment Partners has closed its first evergreen debt fund to focus on multifamily bridge financing.

The fund has $157.5M in equity commitments that will support between $450M and $600M in lending and originate senior secured bridge mortgage loans that range from $10M to $100M and have a max stabilized loan-to-value of 75%, a press release stated.

WDIP began investing out of the fund in December and has already used it to finance three assets in Minnesota, Texas and Pennsylvania.

While the fund is the first of its kind for the firm, it won't be the last. WDIP has planned a series of similar funds that will finance Class-A multifamily assets across the country, a spokesperson told Bisnow.

Multifamily tenant demand is strong — signaled by Q4 net absorption closing out at 84,800 units, four times pre-pandemic levels — but construction completions are stronger, according to CBRE. Developers delivered 140,000 units in Q4, bringing 2023's annual total to 416,500. This is the highest amount since CBRE began tracking the market 27 years ago.

Meanwhile, the sector is recalibrating in the face of headwinds. Investment volume fell by 60% in 2023, likely due to spiking interest rates and construction costs coupled with falling rent. Rents dropped 1.2% quarter-over-quarter in Q4 and are predicted to decline for the remainder of 2024. Fitch predicts apartment defaults will double this year.

WDIP’s announcement comes hot on the heels of David Rubenstein, co-founder of the Carlyle Group, saying Monday he launched a fund with Declaration Partners and is looking to raise $400M to invest in multifamily and industrial assets.

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