Walker & Dunlop Unit Closes $135M Fund
The value-add and opportunistic vehicle focuses mostly on industrial real estate.
Walker & Dunlop Investment Partners has closed its seventh discretionary equity fund. Fund VII, a $135 million value-add and opportunistic vehicle, focuses on industrial real estate and middle-market multifamily properties across the U.S. Six of the eight investments in the seed portfolio are industrial assets.
The seed portfolio totals more than 50 percent of the capital commitments and is well on its way to fully deploying into what the team believes will be an exceptionally favorable market. The industrial investments are in the Chicago, Atlanta, Philadelphia, Phoenix and Portland, Ore., markets, while the multifamily investments are in the Los Angeles and Bentonville, Ark., metro areas.
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Brian Cornell, managing director & portfolio manager of equity at Walker & Dunlop Investment Partners, told Commercial Property Executive a large portion of the industrial assets were acquired vacant but significantly leased up with deal sizes ranging between $10 million to $40 million. He said the industrial portfolio includes a mix of warehouse and distribution, industrial outdoor storage and manufacturing. The properties are typically smaller than 300,000 square feet and situated in infill locations in major metros.
“The seed portfolio doesn’t include any shallow-bay product or cold storage, but we aren’t opposed to these segments of the industrial market,” Cornell told CPE.
In addition to Cornell, Fund VII is managed by Ryan Castle, Marcus Duley and Mitch Resnick.
Fund VII focus
The fund capitalizes on underutilized and mispriced assets with actionable value enhancement plans. The core focus is on middle-market deals with equity checks ranging from $5 million to $25 million, targeting investments that often fly under the institutional radar.
Cornell described Fund VII as a smaller, tactical equity vehicle designed to deploy capital quickly and efficiently in a space that has opportunities but limited competition among equity providers. The goal is to provide investors with a diverse portfolio of 2024 and 2025 vintage investments benefitting from cyclical pricing lows, strong long-term demand fundamentals and higher stabilized yield profiles that can withstand higher interest rates and generate attractive risk adjusted returns.
“We still see a strong buying window for industrial opportunities – smaller equity players are still largely on the sidelines and market fundamentals, particularly for smaller industrial product is very healthy – much tighter than the larger industrial segment (500,000 square feet and up) where most of the new supply/resulting softness lies,” Cornell told CPE.
A wholly owned subsidiary of Walker & Dunlop Inc., WDIP is a real estate private equity firm which manages capital on behalf of endowments, foundations, pension plans, private funds, insurance companies, family offices and high net worth individuals. The firm has $6.3 billion in assets under management and has invested $16.6 billion in debt and equity across 610 transactions over the past 18 years.
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