Dear Fellow Shareholders
William M. Walker, Chairman and CEO2021 was a transformative year for Walker & Dunlop, with the combination of our people, brand, and technology driving exceptional financial results as we continued to invest heavily in new markets and technology.
The people of W&D stepped up for our clients across the country as "the great reopening" created a very active commercial real estate (CRE) market. The dramatic brand expansion that began during the pandemic accelerated in 2021, with the growth in our transaction volumes and popularity of the Walker Webcast pushing W&D into every corner of our industry. And the actionable technology solutions we built and effectively deployed drove client engagement and incremental sales.
We delivered growth across every area of our business in 2021, generating record financial performance. Total transaction volume grew to $68 billion, up 66% from 2020, reflective of the very active CRE market and W&D having the people, brand, and technology to meet our clients' needs. Our property sales volume grew an astounding 214% year-over-year to $19 billion, and played a large role in driving our debt financing volumes up 40% to $49 billion. Had we not invested heavily in the property sales business prior to the pandemic, a good amount of these property sales and financing volumes would have gone to Walker & Dunlop competitors. The fantastic growth in transaction volumes generated total revenues of $1.3 billion, up 16% year-over-year and diluted earnings per share of $8.15, up 6% year-over-year.
It is extremely important for investors in Walker & Dunlop to understand how and why the dramatic growth in transaction volume resulted in only modest earnings growth, and what it means about W&D's business model, future growth, and financial performance. During 2020, in the depths of the pandemic when investors and capital fled the markets, Walker & Dunlop generated record financial performance due to our long-standing and scaled lending operations with Fannie Mae, Freddie Mac, and the US Department of Housing and Urban Development (HUD). Similar to what happened during the Great Financial Crisis, Walker & Dunlop's access to counter cyclical capital allowed us to continue lending when the markets dislocated, and made W&D the largest provider of capital to the multifamily industry in the United States in 2020. In 2021, as the markets recovered and massive volumes of capital returned to the CRE industry, the relevance of Fannie, Freddie and HUD faded, and the competitive landscape shifted to capturing deal flow and placing the most appropriate market-rate capital available into a given CRE transaction — which is exactly what W&D did! W&D's ability to generate record financial performance in 2020 and 2021, in two of the most dramatically different macroeconomic environments in our lifetime, is what differentiates our business model and financial performance.
The other extremely important aspect to record performance in 2020 and 2021 is how the change from lender to services provider impacted W&D's financial statements. Record lending with Fannie, Freddie and HUD in 2020 generated huge volumes of mortgage servicing rights, which are booked as non-cash revenues and earnings on Walker & Dunlop income statement. In 2021, led by dramatic growth in property and debt brokerage services revenues, cash revenues and cash earnings grew dramatically, generating adjusted EBITDA1 of $309 million, up a staggering 43% from 2020. This fantastic financial success translated into total shareholder return of 67% in 2021.
The transformation of Walker & Dunlop from a mortgage-centric lender into a broader, technology-enabled services firm is market driven and strategically planned. We acquired Zelman & Associates early in 2021 to add research and investment banking capabilities to our service offering. We later acquired Alliant Capital to become one of largest capital providers and owners of affordable housing in the United States. And then early in 2022 we acquired GeoPhy, a CRE technology company with database and artificial intelligence capabilities that will drive dramatic growth across all of Walker & Dunlop, and specifically our small balance lending and appraisal businesses over the next several years.
These investments are integral parts to the achievement of our ambitious strategic growth plan called the Drive to ’25, with an overarching goal of doubling revenues from $1 billion in 2020 to $2 billion by 2025. And we made fantastic progress on the Drive to '25 in 2021! We set a goal to grow our debt financing volume to $65 billion by 2025, and in 2021 we increased it by 40% to $49 billion. In property sales, we set a goal to grow to $25 billion by 2025, and in just one year, grew volume 214% to $19 billion. We finished 2021 with a loan servicing portfolio of $116 billion, up 8% year-on-year, exactly the annual growth we need to achieve our Drive to ’25 goal of $160 billion. Finally, we set the ambitious goal to grow assets under management (AUM) in our fund management business to $10 billion by 2025, and with the acquisition of Alliant Capital, added $14 billion of AUM and achieved our Drive to ’25 goal in 2021.
Beyond financial metrics, the Drive to ’25 contains ambitious environmental, social, and governance (ESG) goals including quantitative goals to increase diversity, equity and inclusion, reduce our carbon footprint, and increase lending on affordable housing. More information on these efforts can be found in our extensive ESG report available on our website.
Investor demand for commercial real estate remains extremely high entering 2022 due to "the great reopening" and increased inflation. As the number of office workers, business travelers, and affordable housing seekers continues to grow post-pandemic, commercial real estate continues to attract investment dollars. And with inflation hitting across the economy, owning hard assets with the ability to increase rents daily (hospitality), annually (multifamily) and every few years (industrial, retail and office) is seen as a very smart sector for investment. 2021 showed that Walker & Dunlop has attracted the very best people, built one of the strongest brands, and invested in cutting-edge technology to lead the CRE financial services industry going forward. And we did that with only 1,300 people, generating over $1 million of revenue per employee!
As Walker & Dunlop's largest individual shareholder, I would like to thank you for your investment in our company and confidence in our team. The past two years are reflective of the amazing business model and people that make Walker & Dunlop the company it is. And the most exciting part is that we are just getting started!
We have the very real opportunity over the next five years to achieve our mission of becoming the premier commercial real estate finance company in the United States. That is an exciting and humbling thought. I would like to thank you for your trust, confidence, and investment in Walker & Dunlop.
William M. Walker
Chairman & CEO
This shareholder letter contains forward-looking statements within the meaning of federal securities law. Please see page 3 of our 2021 Form 10-K filed with the Securities and Exchange Commission for additional information regarding forward-looking statements.