Walker & Dunlop Buying CWCapital for $220M

Walker & Dunlop, Inc. announced this month that it had entered into a definitive agreement to acquire its rival lender, CWCapital LLC, for $220 million. According to the company, $80 million of the purchase will be provided in cash and approximately $140 million in Walker & Dunlop stock, subject to potential adjustment based on changes in the company's stock price, and pending the expected closing within then next 3-4 months.

"We are thrilled to announce this acquisition. CWCapital is an exceptional company with an outstanding team and a corporate culture very similar to Walker & Dunlop's," commented Willy Walker, Chairman, President and CEO of Walker & Dunlop. "The combined company will be one of the largest commercial real estate lenders in the United States," Walker continued. "CW's people, credit discipline, and client focus are highly regarded throughout the industry. It's a wonderful accomplishment to bring these two fantastic companies together and create a true industry force."

CWCapital, is a subsidiary of CW Financial Services LLC, which is owned by Fortress Investment Group LLC. Founded in 1972 and with 180 currently employees, CWCapital lends money to multifamily, healthcare and commercial real estate industries and has in-house origination capabilities for Fannie Mae, Freddie Mac and life insurance companies.

For more news and information visit Blumberg Capital Partners.

Southwest Bancorp Sells Nonperforming Assets

Southwest Bancorp, Inc., parent of Stillwater National Bank & Trust Co., announced this month that it had sold over $300 million in nonperforming loans, potential problem loans and other real estate assets. According to an American Banker article, roughly $170 million of the loans are nonperforming; the sale to SW Loan Portfolio Holdings LP and its affiliates will produce a pre-tax loss of $101 million, which it will record in the fourth quarter. The holding company was organized in 1981; on Sept. 30, 2011, it had total assets of $2.6 billion, deposits of $2.0 billion and shareholders' equity of $367.0 million reported Tulsa World.

Rick Green, President and Chief Executive Officer at Southwest, said, "These sales immediately and substantially reduce our nonperforming assets and potential problem loans. We believe this action is a major step toward achieving our goals of reducing problem assets, returning to sustained profitability, resuming dividends, and producing reliable and attractive returns for our shareholders. Southwest's Board of Directors decided to enter these agreements after careful consideration of the potential costs and benefits to Southwest and its shareholders and consultation with financial and legal advisors and management. This included consideration of the estimated costs and benefits of continuing the workout process for these assets over time versus the estimated costs and benefits of their immediate resolution by sale."

For more news and information visit Blumberg Capital Partners.

Wells Fargo Expands CRE Lending

The end of August was busy for Wells Fargo with the Anglo Irish Bank deal, which followed the purchase of about $1.4 billion in U.S. loan holdings from the Bank of Ireland and roughly $500 million in loans bought from Allied Irish Banks PLC earlier this year. The Wall Street Journal has written an article looking at Wells Fargo's marked expansion in CRE titled Wells Fargo Jumps on Commercial Deals. An excerpt from the article:

Wells Fargo had emerged as the leading holder of commercial mortgages among banks, according to Trepp LLC, which tracks commercial property lending. During the second quarter, Wells Fargo's loan holdings grew by $3.3 billion, bringing its total to $100.2 billion, according to Trepp. The data exclude construction loans.

"We like the risk-return of the business," said David Hoyt, who heads wholesale banking for Wells Fargo.

The amount of commercial property loans held by the next five largest commercial real-estate lenders after Wells Fargo decreased by $1.3 billion, according to Trepp. While many of these banks are making new commercial real-estate loans, old loans have been maturing or have been sold off at a faster pace than new loans have been made.

Still, Wells Fargo has been far more aggressive than other banks, partly because it was less wounded by commercial real estate than many competitors, some of which virtually shut down lending in the sector through much of the downturn.

For more news and information visit Blumberg Capital Partners.

Fitch Ratings Shows Fewer CMBS Due in 2012

Fitch Ratings has released their latest finding on the U.S. commercial mortgage backed securities (CMBS) sector with some encouraging news for the coming year as fewer loans are coming due in 2012. In transactions rated by Fitch, approximately 1,200 commercial mortgage loans totaling $17.3 billion are scheduled to mature in 2012, representing a sizeable drop compared to 2,000 loans totaling $22.5 billion that matured in 2011. The largest concentration of maturing loans in 2012 will come from loans secured by office properties, representing 38% of impending maturities reported the Wall Street Journal.

Fitch continues to expect the majority of loans to payoff at maturity despite the short term volatility of the capital markets. "Most maturing loans, particularly those from earlier vintages, benefit from stable performance and years of scheduled amortization, which make them more easily financeable in today's market," said Adam Fox, Senior Director at Fitch Ratings. The most challenging loans to refinance are those that were originated in 2007, the peak of real estate values. "Borrowers will likely need to contribute additional equity to secure financing for five-year loans."

For more news and information visit Blumberg Capital Partners.

Colony Picks up $817M FDIC Portfolio

A consortium of investors organized by Colony Capital has acquired two portfolios of distressed assets from the Federal Deposit Insurance Corp. for about $193 million. The loans, which were for residential and commercial property acquisition, development and construction, had a total unpaid principal balance of $817 million. Los Angeles-based Colony, led by Chairman Tom Barrack, already has won four other portfolios of FDIC mortgages valued at more than $3 billion, making it the largest winner of multiple deals according to a Wall Street Journal article.

Colony, which put some money in the purchase, will be in charge of disposing of the assets, working out settlements with the borrowers, foreclosing or reselling the loans. Colony said it acquired the two portfolios of 1,505 residential and commercial loans for 23.6 cents on the dollar.

For more news and information visit Blumberg Capital Partners.

Fitch Report Shows US CRE Delinquencies Eased in October

According to Fitch Ratings the delinquencies on U.S. commercial real estate loans eased in October due to increased incidence of loan extensions. The exentions helped precipitate a slight drop in CREL CDO delinquencies and, as Fitch Director Stacey McGovern explained,"are short term remedies designed to allow added time for further negotiation of pending loan modifications."

CREL CDO delinquencies fell slightly to 12.8% last month (from 12.9% in September). Total loan extensions in October were reported at 58 in the month, which is significantly higher than the 2010 monthly average of 37 extensions. Asset managers reported $98 million in realized losses from the disposal of distressed assets last month. Total realized losses across such products rated by Fitch total more than $1.7 billion. "The risk still remains for realized losses to increase if real estate trends backpedal, though they have been in a relative holding pattern for the last few months," McGovern added.

For more news and information visit Blumberg Capital Partners.