Walker Webcast: Willy Walker on the Risks, Missed Opportunities and Lessons That Shaped His Career

The 300th episode of the Walker Webcast, which aired Oct. 14, featured Walker & Dunlop Chairman and CEO Willy Walker as the interviewee, rather than the one asking the questions.

In the hour-long question-and-answer session hosted by The New Yorker’s political reporter Evan Osnos (and driven by submitted audience questions), Walker discussed risks, missed opportunities and leadership lessons that helped drive his career.

A Risky Acquisition

In 2012, Walker & Dunlop negotiated the acquisition of a company owned by a private equity firm. As three bankers at the company brought in most of the revenue, “we said we would like to have a force majeure clause in the purchase and sale agreement that says that if these three bankers don’t come across in the acquisition, we can back out of the deal,” Walker said.

The seller’s response? “The private equity firm that was selling us the company said, ‘that’s on you,’” Walker said.

The situation presented a dilemma. Without those three bankers, Walker & Dunlop risked acquiring a company that could immediately lose nearly half its revenue.

However, Walker persuaded his board to proceed, only to learn that on the day of the closing, a major competitor “put a massive amount of money on the table for those three bankers to move across to our competitive firm,” according to Walker. “I said, ‘Oh. I may have made a mistake.’”

But during escrow, Walker & Dunlop encouraged the bankers to join the firm, and they did. “They’re still here today,” Walker said.

He acknowledged that from a legal or board-of-directors standpoint, the deal might not have made sense. Walker said he had confidence in his team and its ability to retain the bankers to move forward with the transaction.

“Unless you’re willing to take those types of risks, you’re not going to be able to create the type of growth and value that we have created,” he said.

The Deal He Passed Up

Another risk-related decision occurred early in the 2010s, when Walker & Dunlop had an opportunity to enter the property brokerage business through another acquisition.

“It was a company that had a bunch of licenses,” he said. “I thought that if we bought it, wrapping all of those licenses together would be very difficult. So I passed on it.”

A competitor acquired the company and proceeded with the acquisition, which proved to be a valuable move for the firm.

“As I look back on sort of mistakes or would have should haves, that would be one at the top of the list as far as things that I would have liked to have done,” Walker said. “In hindsight, I probably should have looked at the acquisition in a different way.”

Navigating a Downturn

Walker also discussed the challenges of taking Walker & Dunlop public in 2010 at a market cap of $220 million. Walker then realized the difficulty of encouraging banks and institutional investors to participate.

Walker said that the company did get the larger investors, “but you know it takes a lot of work to get a Fidelity or a T. Rowe price to invest in a $220 million market cap company that, oh by the way, has a lot of family ownership as well.”

The public listing benefited the company and its shareholders, he said. But Walker & Dunlop hasn’t been immune to difficult periods, including a recent downturn marked by higher interest rates and sluggish transaction volumes.

“We’re in a retrenchment period right now, and really focusing on what creates shareholder value in the long term,” Walker commented. “This is where you hunker down, get the team moving in new ways, and you think and innovate at times like this.”

Concerning the industry, Walker said that since 2022, “there has been a lot of hope in our industry that rates would go back to where they were,” Walker said.

Not so much today.

 “They’re going from ‘I was hoping that rates were going to go back down, and I don’t think they’re going to,’ to ‘now I’ve got to be really fearful that they go up from here. Walker noted.

Walker discussed a borrower who had secured 10-year mortgage financing at an all-in rate of 5.03% several months earlier. The borrower recently told Walker that the 5.03% figure looked good now.

“Maybe they were smart enough to move then, and maybe they were just lucky,” Walker said. “But I do feel that we’re moving from a hope trade to a fear trade.”

Learning From Missteps

Walker’s reflections extended beyond corporate strategy. He acknowledged that his early years leading the family business were driven by a determination to prove himself, saying he gave his father credit for letting him “act like an obnoxious, arrogant jerk for a period of time when I first joined the company.”

Walker indicated that personal and professional reinvention comes from life’s more challenging moments.

“It’s when times are tough, when you’ve had personal loss, professional loss, whatever the case might be, that requires you to dig deep, really look at what you were doing or what your organization was doing, and assess what the path for the future is,” he said.

On-demand replays of the Oct. 14 Walker Webcast are available through the Walker Webcast channels on YouTube, Spotify and Apple. Subscribe to get invites, replays and articles for new Walker Webcast episodes every week.