2023 Annual Review

Dear Fellow Shareholders

2023 was a challenging year for the commercial real estate industry as inflation and tightened monetary policy dramatically shifted the cost of capital and property valuations. Walker & Dunlop’s total transaction volume was down 48% year over year to $33 billion, yet due to the recurring revenue streams of our business model and aggressive cost management, full year adjusted EBITDA¹ was $300 million, down only 8%. The W&D team, brand, and technology held up extremely well in a highly challenging market, which led to strong total shareholder return of 46% on the year.

Walker & Dunlop's core business provides commercial real estate owners and developers with capital and services to operate and grow their businesses. In 2023, the macro-economic environment transformed -- and essentially halted – transaction activity across the industry, making it paramount to have an underlying business model -- with non-transaction related revenues -- to power the business forward. W&D's $130 billion loan servicing portfolio and $17 billion of assets under management both generated strong recurring revenues that allowed W&D to continue investing in our people, brand and technology. We also saw several of our newer businesses, some with significant technology underpinning their service offerings, contribute meaningfully to our financials. Zelman, the housing-focused research and investment banking firm we acquired in 2021, provided W&D with stable subscription-based research revenues as well as growth from investment banking fees. Small balance multifamily lending and appraisals -- two highly technology-enabled businesses thanks to our acquisition of Geophy in 2022 -- both gained market share during 2023. We ended the year as the third largest small balance lender with Fannie Mae and fourth largest lender with Freddie Mac and grew our multifamily appraisal market share to 11%, up from 6% in 2022. Finally, our acquisition of Alliant to broaden our service offering in the affordable housing industry by becoming a major low-income housing tax credit syndicator delivered significant financial and strategic value in 2023.

Our business model, continuous investments to technologically enable and diversify Walker & Dunlop, and active management of our enterprise have consistently generated outstanding shareholder return. Over the past one, five, and ten years, Walker & Dunlop has generated total shareholder return of 46%, 189%, and 688%, significantly greater than any of our direct competitors in the commercial real estate services, specialty finance, and technology sectors. This outperformance is over the short, medium, and long term thanks to establishing bold, highly ambitious five-year business plans, focusing our exceptional team on achieving those plans, and then executing. And we have maintained a strong balance sheet throughout thanks to maintaining exceptional credit discipline across our company.

We remain focused on our current five-year growth plan, the Drive to ‘25, by adding bankers and brokers to grow our debt and property sales volumes, scaling our servicing and asset management businesses, and growing our newer businesses of small balance lending, appraisals, and investment banking. The broad Drive to ‘25 financial targets of $2 billion of revenues and $13 of diluted earnings per share are wildly ambitious given the pullback in transaction volumes in 2023, but the underlying strategy of the Drive to ‘25 remains in place, and with our current team and technology investments, we can achieve the Drive to ‘25 financial goals in a robust macro environment. That is exciting and gives us a pathway to dramatic growth if we continue to invest in our people, brand and technology.

The execution of our long-term, ambitious business plans has allowed us to gain significant scale and brand in the commercial real estate lending and services industry with only 1,350 employees. As machine learning and artificial intelligence transform the services sector, we look forward to growing into the market of the future by combining our people with the very best technology rather than having to shrink into it like many of our competitor firms will likely need to do. We have the business model, strong balance sheet, and team to continue expanding our business, exceeding our clients' expectations, and delivering exceptional shareholder return.

I would like to personally thank you for your investment in Walker & Dunlop and continued confidence in our business model and team.

Sincerely,

William M. Walker
Chairman & CEO

This Annual Report includes forward-looking statements within the meaning of federal securities law. Please see page 3 of our 2023 Form 10-K filed with the Securities and Exchange Commission for additional information regarding forward-looking statements.