Counting Capital Podcast, Episode 15: Willy Walker

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Robert Brunswick:

I want to welcome everybody to Counting Capital. I’m your host, Robert Brunswick, and we’re in for a great treat today. It’s my pleasure to have as our guest, Willy Walker, the Chairman and Chief Executive Officer of Walker & Dunlop. Our own company is a borrower of Willy’s. We borrowed a couple of projects in Texas and Colorado, so I have firsthand perspective of the quality of his organization.

I want to give you a bit of a bio on Willy. Under his leadership, Walker & Dunlop has grown from a small family-owned business to become one of the largest commercial real estate finance companies in the United States. Walker & Dunlop is listed on the New York Stock Exchange and in its first 10 years as a public company, it shares appreciated over 800%, quite impressive. In the career experience category, he’s launched an airline in Argentina, built out a global call center company in Latin America and Europe, worked in private equity and on Wall Street from Morgan Stanley. He’s earned a master’s degree in business administration from Harvard, a bachelor’s degree from St. Lawrence, and he serves on the board of the U.S Olympic and Paralympic Foundation. Thank you for doing that, Willy. He’s an avid runner, skier, cyclist, and has run the Boston Marathon in 2:36. So for those of you that are not marathon runners, I’ve run several, that’s under six minute miles pace, so no small task.

Today we’re going to talk to Willy about his own career, the life of an entrepreneur, the importance of building culture, today’s real estate industry, and a look into the future of business and specifically real estate. For full disclosure, in addition to Willy’s day jobs and as a byproduct of the pandemic, he created The Walker Webcast delivering amazing content and education through top talent guests including such names as Steve Case, Alex Rodriguez, Barry Sternlicht, former CEO of IBM, Ginni Rometty, former US ambassador to Israel, Thomas Nides, and of course famed real estate academic, Peter Linneman, to name a few. His podcast is one of the leading 1.5% of all global podcasts that has now been viewed by over 10 million. So it’s a real treat to, as I like to say, flip the script on Willy and have him today as a guest on our own Counting Capital podcast.

Willy, welcome. This is a real treat. I appreciate you taking the time out.

Willy Walker:

My pleasure, Robert. Great to be with you.

Robert Brunswick:

Where are we catching you today?

Willy Walker:

I’m in Denver. I was going to try and do this from my office, and I got caught on some morning calls, and so I’m at home today on a Friday. I typically try and get into the office every day. I’m in Denver, but today was one of those days I got trapped at home on early calls and have stayed home.

Robert Brunswick:

I got it. Well, what did I miss about your bio that you’d like to maybe supplement for our listenership that might help them better understand you and your perspective for our session today?

Willy Walker:

Oh boy, Robert, that’s a tough one. I always find that bios… I mean, the 2:36 Boston Marathon, it’s interesting because you can put all sorts of things on my bio about education, about experience, about whatever the Entrepreneur of the Year of Ernst & Young and what have you, and invariably everyone goes to that 2:36 at Boston, which is interesting, only in that it’s a running race. It just happened to be a very fast time. But it’s also something that if I’d put on there, I don’t know, whatever, travel to the moon, nobody can associate with that. There are only… I don’t don’t know how many astronauts there’ve been. 200 astronauts. There are only 200 people who have gone to outer space, so as a result of that, you read that and you’re like, wow, that’s pretty impressive, but you don’t have any context for it. You don’t know what that is like.

Whereas lots and lots of people have run a marathon or run a 10k, and so when they see a 2:36 and, as you accurately said, that’s under six minute per mile miles, people understand what that is. I think that context in our world is so important. I was doing a podcast last week with Larry Sabato of the Center for Politics at UVA. We were talking about the assassination of President Kennedy in 1963. One of the things that Larry pointed out as we were talking was that President Kennedy, when he first came up with the idea of the moon project and going to the moon, he originally wanted to set the goal of going to Mars.

Fortunately, the people at that time who were working on the space program came into the president and said, “Mr. President, going to Mars is not an achievable goal. Going to the moon, as ambitious and hard as that is, we might be able to pull that off, but there’s no way given how far away Mars is and given where we are from a development standpoint that in your lifetime or anyone’s lifetime that we know of today, we’re going to be able to get there.”

I thought that was so insightful in the sense that you can come up with these bold ridiculous goals, but they have to be achievable. So if the president set Mars as the goal, I don’t think the space program gets the development and the success that it got of being such a leader in the world. So I just think about certain goals and objectives that we all try and put forth for ourselves, what people can go towards, and then also being goals that might be ambitious but also have to be achievable or else they’re nothing but a dream.

Robert Brunswick:

Well, I like the perspective in the ad that you’ve made there about goal setting and sometimes pushing the envelope in that goal setting. But my takeaway on that marathon, as someone that’s done those, is you’re a disciplined guy, you know how to compartmentalize and you’re certainly a goal setter, and I think that will bear out as we have more conversation here today.

Help me and our audience a bit with what is Walker & Dunlop’s primary business? So give me that enhanced elevator pitch, if you will.

Willy Walker:

Just as a quick aside on the enhanced elevator pitch. I was graduating from business school and McKinsey gave me an offer to go work for McKinsey, and McKinsey offers are typically by an office, so you get an offer from the New York office or the Boston office. I got an offer to go work in any McKinsey office I wanted to, so I flew to San Francisco and went to the McKinsey office in San Francisco. I’m at the top of the Trans America building and I’m done talking to a bunch of McKinsey consultants who’d gone to HBS and I’d known them when they were at business school. I’m in the elevator on the way down, it’s just me and this, what appeared to me now, probably someone my age, but at that time seemed to be an elderly gentleman.

He said, “So how’d it go?” I was like, “Oh, no, I wasn’t interviewing. I’ve got an offer. I’m just trying to figure out whether I want to come and work for McKinsey.” He looks at me without pausing, Robert, without pausing and he goes, “I got a question for you. Do you read the Sunday New York Times?” I look at him and I’m like, “Well, yeah, I do.” He says, “So what’s the first section you read?” I go the front page. He goes, “What’s the second?” I go, “Business.” He goes, “What’s third?” I go, “The Week in Review.” He goes, “What’s fourth?” I go, “The sports page.” He goes, “What’s after that?” He’s going through all these things and then finally he looks at me and says, “Do you ever do the crossword puzzle?” I go, “No, I hate crossword puzzles.” He looks at me and he goes, “You look like a doer. At McKinsey, what we do is solve crossword puzzles every day. Oh boy, if you don’t like doing crossword puzzles, you should not be a consultant. Go do something with your life.”

All of a sudden the doors open up, Robert, and I’m sitting there and this guy walks out and I’m like, in this elevator ride, he’s like summed up me and who I am by asking me about the New York Times and what I actually read and engage in. I literally got off that elevator and I called up McKinsey and Bain, the two consulting firms that had given me offers, and I said to both of them, “I’m not going to come be a consultant.” It’s true though in that about just understanding what you’re good at and what attracts you and what you spend your time studying. That gentleman… Who I don’t know his name, I’ve actually talked to a bunch of McKinsey consultants to try and figure out who it was to write him a note and say thank you because you’ve sort of changed my life. But I thought it was a really interesting elevator pitch.

To your real question, what is Walker & Dunlop? We’re a real estate financial services company. We have grown, as you accurately said, from being a very small family-owned company, one office, 46 employees, when I joined the firm in 2003. We thought the company at that time, because it was private, was worth about $25 million. In over a 20-year period, grew it from those 46 employees to 1,400 employees, grew it from 25 million of revenue to 1.4 billion of revenue, and grew the value of the firm from 25 million to 5 billion at its peak, before the great tightening began. I don’t watch our stock price, Robert, but I think our market cap today is somewhere around $3 billion. So as you accurately said, it’s been a great run.

What do we do? We finance commercial real estate with a very significant focus and concentration on multifamily properties. Then we also sell multifamily properties. We appraise multifamily properties. Then we have a research division that writes research on both single-family as well as multifamily markets. We have an investment banking group that works with large owner-operators of all commercial real estate, but again, more specifically multifamily in selling platforms and doing investment banking services. Then behind all of that, we have a very scaled servicing and asset management business. Our servicing portfolio today of loans that we’ve originated at Walker & Dunlop sits at right around $130 billion of loans. That’s over 7,000 properties across the country that we service every single day. Then our asset management business has raised and manages capital for large institutional investors that want to put their money into both commercial real estate in a debt fashion or an equity as well as tax credit investors. We’re the fifth-largest tax credit syndicator in the country today, and that business has about $16 billion of assets under management as we sit here today.

So when I started in the business, Robert, if you told me at that time that we would not only be going head-to-head with the likes of Wells Fargo, J.P. Morgan and CBRE on a daily basis, but winning 20 years after I joined the firm, I would’ve laughed at you because we didn’t have the brand, we didn’t have the people, we didn’t have the capital. We had no ability to compete with those types of firms 20 years ago. Over the last two decades, we’ve built up those capabilities and, as you accurately said in the lead in, I mean, right now we’re the largest agency lender in the country, so we’re the largest provider of capital from Fannie Mae and Freddie Mac into the multifamily industry in the country. We’re the third-largest lender on all multifamily properties in the country, and we’re the sixth-largest lender on commercial real estate in the United States.

So to have been able to build that scale… I mean in that sixth-largest provider of capital to commercial real estate, we sit between Goldman Sachs and Citigroup in that league table. I mean, honestly, if you said to me 20 years ago, you’re going to sit between Goldman Sachs and Citigroup, I’d have tried to come up with something quippy to sort of say where I could have possibly ranked with Citigroup and Goldman Sachs and I can’t figure it out. But that’s really quite something. It says a lot about the team. It says a lot about the business plans that we’ve been able to put in place as we’ve grown the firm. Then I also think it’s super indicative of the culture we’ve been able to both build and maintain as we have scaled the company as dramatically as we have.

Robert Brunswick:

So hold on culture for a minute. I want to take you down a little bit of a different road, as we get to that. You and I share more in common than we realized. My first job was in the Transamerica Pyramid 1981 after graduating from Berkeley, knocking on doors as an office leasing agent. So they did have quite the elevator system there, and all the floor plates would grow as you got towards the bottom, but it was a great place to have a foundational experience in real estate.

But as I look back and think about your resume and your bio, there’s a nice legacy at Walker & Dunlop with the original company being founded in ’37 by your grandfather and your uncle. Tell us a little bit about the importance of shepherding the family legacy, slash, reputation and working in a family business to take it to the next level which, as you’ve indicated, you’ve clearly done.

Willy Walker:

I guess there are a couple key components to that, Robert. I think the first is that I really didn’t have any interest in joining the family company. Matter of fact, I mean… I don’t know. I don’t know. The first time I even thought about it, literally thought about it as being something that I might want to do was in November of 2022… 2002, excuse me, not ’22, 2002. I was on the board of Walker & Dunlop at the time. I did a strategic offsite with the management team of Walker & Dunlop and I led the strategic offsite. As I was leaving the Marriott Hotel right next to Dallas Airport to fly back to London, because my wife and I were living in London at the time. I was leaving, and I turned to my dad and I said, “Wow, there’s so much opportunity here. Maybe I could help you.” My dad looked at me and he said, “I’ve always known you could help me. I just didn’t think you had any interest.” I didn’t.

I’d always thought that I would go up through the ranks of running… I ran Latin America for a multinational. I ran Europe for a multinational. My idea was I’ll become CEO of some big multinational company. So going to the family company was never sort of something that attracted me. But when I decided to do it… A lot of people thought when I joined Walker & Dunlop that I was there to sell the firm. Fortunately, we’ve had a number of offers to sell the firm. In hindsight, very, very lucky that we didn’t sell the firm at various points in our time, given the growth and the shareholder value we’ve been able to build. But I do take being the third generation of Walkers to run the company very, very seriously.

I did a new employee orientation call yesterday, and as I talked about the varying value propositions of Walker & Dunlop and what we stand for, there’s a slide that talks all about honesty and integrity. What I always say to every new employee who joins Walker & Dunlop is that you’re joining a firm where the CEO’s name is on the door. There aren’t a lot of companies that have that, much less a lot of public companies that have the CEO’s name on the door. We will make lots of mistakes at Walker & Dunlop. We’ll make investments that don’t work. We’ll make loans that don’t work. We will fail. Hopefully we learn from our failure and grow from it. But the one thing we will never, ever do is do anything to put at jeopardy the reputation of this firm. That means that we all act in an honest way all the time with the utmost of integrity.

I put that right up front because as the steward of this company, heaven forbid we would not have great financial performance and this company would lose money, and I wouldn’t be the right person to shepherd it forward, but that to me would be far less impactful and bad than doing something that could in any way hurt the reputation of the firm that I have been so honored to take over from my dad and for my grandfather and my great uncle.

Robert Brunswick:

Very well said. I’m sure that your family unit and those from the past generations were quite proud and appreciative of your leadership and your respect to the family’s name and what you’ve accomplished. So great to hear that.

Talking about going public, why did you take the company public? You think about most people in the real estate business, I mean, certainly there’s the access to capital, but what benefits did it provide you? Then moreover, responsibilities and stresses to running a public facing business?

Willy Walker:

Hindsight’s 20/20 vision. It’s pretty clear that I was probably a little bit too arrogant and a little bit too ignorant at the time to understand what being a publicly traded company was. I was arrogant in the sense that it just sounded like something neat and fun, and I’d always wanted to run a publicly traded company. I’d worked for a publicly traded company before coming to Walker & Dunlop, and that was something that I thought would be fun and neat. So that’s the arrogant side of it. The ignorant side of it was that I really didn’t understand that the world didn’t need a $220 million micro cap mortgage lending company in 2010. It just didn’t. I had bankers who told me that it did. It did not. It’s very evident that the world did not need… I mean, remember we were the first mortgage company, single family or commercial, to go public after the great financial crisis, and mortgage was still a four letter word when we went public. So getting people to buy into a micro cap stock that’s a mortgage company in 2010 was a Herculean task.

But look, we had… I won’t go through the whole history, but basically I’d recapped the company and taken on some debt in 2007 just before the GFC, and we had that debt sitting on the balance sheet through the GFC. We’d made it through the GFC. We’d done a deal in 2009 to grow the company dramatically, which was a little bit of zigging when others zagged. I wanted to recap the company, and I started originally looking for private equity investors to come in and take out the debt and be new equity investors in the platform. Then an old friend of mine who was an investment banker said, “You could also take this public. You’re large enough now we could do it.” I was, at that time, as I said, arrogant enough and ignorant enough to say that sounds like a great idea.

The part about it though, that I think I would advise people, unless you have to go public, I wouldn’t go public, so unless you need the capital. One of the interesting things about us being a public traded company is we’re not a voracious user of capital. If you’re a mortgage lender, you need capital all the time. So you’re accessing the markets all the time and because you’re accessing the markets all the time, you get great buy side and sell side coverage from the analysts, and you make a market and the market sees you a lot. When you don’t access the capital markets that much and you’re also a smaller cap company, you’re not getting the eyeballs. So when we went public, getting float in our stock was very, very difficult, particularly because my dad and I owned so much of it. We’d also done a deal in 2009 where Credit Suisse took a bunch of the stock in Walker & Dunlop, and they held that stock into us being a publicly traded company.

So the flow to the company out of the gates was very, very thin. So if you’re Fidelity or T. Rowe Price and you want to invest in Walker & Dunlop, it’s not really a public security because the number of shares traded per day was like 20,000, 30,000 shares per day. That’s not a publicly traded company that’s essentially a private company with sort of a public option, if you will. So I didn’t understand all that. As we’ve grown and as our float has gotten bigger and bigger, and as we’ve expanded the platform and as we have gotten more analyst coverage and performed so well in the capital markets, now in hindsight, I can sit there and say, “Hey, it’s great that we’re public.” But 2011, 2012, it was tough.

I would also add that we do spend a huge amount of money on an annual basis complying with being a publicly traded company. I am not a fan of Gary Gensler at the SEC right now. I probably shouldn’t say that publicly. But I mean, Gary Gensler seems to be hell-bent on adding the regulatory burden on publicly traded companies to make it so that companies don’t want to be public. You look at the public and private markets… I had Marc Lipschultz who runs a firm called Blue Owl on the Walker Webcast, and we put up this chart during the podcast because he’s a massive provider of capital to the private credit markets. Marc, in the Blue Owl annual report, has this slide which shows the number of public companies going from 10,000 in 2000 to 6,000 today, falling down, and then the number of private equity held companies going from 2,000 to 20,000. I mean, it’s two X’s that go completely in the opposite direction. We should be doing more to making companies want to be public. We should make it so that the public has access to publicly traded companies.

So you see people on Wall Street, excuse me, on Capitol Hill like Elizabeth Warren who bemoan, bemoan and sit there and say, “It’s terrible what public companies CEOs do,” and they do this and they do that, and yet she wants the common investor to be able to have the access to these companies. Then she sits there and screams and yells about Blackstone getting bigger and bigger every single day because it’s only qualified investors who can invest in Blackstone funds. So her drive towards more regulation makes Blackstone get bigger and makes the regulatory burden on companies like Walker & Dunlop and other publicly traded companies that much higher.

So that if you wind the clock back to 2010 and you say to Willy Walker in 2010, knowing everything that I now know as it relates to the regulatory burden, would you rather go with a private equity route or go the public company route? I’m thrilled being a public company today because of the scale and the access to the markets we have, but I would say in two seconds, “Go private. Don’t go public because you can get as much in the private markets as you can get in the public markets and the scrutiny that you’re under in the public markets today just gets bigger and bigger because of people like Elizabeth Warren and Gary Gensler adding more and more and more regulation.”

Robert Brunswick:

This is great insight, great perspective, benchmarking for us. Let’s maybe move this to a little bit more of the softer side, if we can. As I know enough of your team members out here, that culture is very important to you. I think you’ve described it as the ultimate differentiator.

I’m curious, since we’ve been talking about public companies, does it really make a difference to Wall Street in the pricing of your stock? Do they value it? Then more specifically, what are the tangible benefits of that culture operationally to you, as you look at your platform?

Willy Walker:

All Wall Street cares about is the numbers you put up. So they don’t sit there and say, “I’m going to invest in this company because it’s got a great culture,” but as you and I both know, if you don’t get the culture right, you’re not going to get the earnings right.

Robert Brunswick:


Willy Walker:

So the two go part and parcel. I don’t think you can differentiate one from the other. They come together. You’re not going to get the financial results without the culture, and therefore you are getting credit from Wall Street for the culture. But there’s some long-term investors in Walker & Dunlop who really understand that’s how we differentiate. That’s how we’ve been able to recruit so many bankers and brokers from competitor platforms. That’s how we’ve been able to keep the bankers and brokers at Walker & Dunlop who come from competitor platforms and get job offers every single day with big signing bonuses to move from Walker & Dunlop to other competitor firms and consistently say no to that. It’s not because we’re paying them 1.5 times what the competition pays them, it’s that we pay them market rate, but they love being at W&D. They love what W&D does for them, their careers, their teams, and at the end of the day for their family and their ability to create a family and grow a family and invest in the fancy new car, the second home or the private school education.

Quite honestly, Robert, that’s to me, as I sit back and look at what we’ve accomplished by the growth in the company, it’s those stories. I mean, I was just out in your neck of the woods probably about a month ago, and had one of our bankers pick me up in his fancy new BMW, and I was amazed at this brand new car. I was just tickled silly that he’d gone out and bought this new car. Then I got picked up on another one who had a Mercedes-Benz G-Wagon. I was like, wow, that’s amazing that this banker has been so successful that he can go out and buy a G-Wagon. So those are little things, but they make a big difference. They really do.

I think the question as it relates to how do you build it, how do you maintain it? We’ve acquired 16 companies, 16 companies. It’s hard to acquire 16 companies and maintain a defined, distinct culture. I think, at the end of the day, it really has to do with my partner in this business over the last 20 years, who’s just about to retire, is a gentleman named Howard Smith. Howard and I looked at the world, we do look at the world in a very similar way. We look at our colleagues at Walker & Dunlop in a very similar way as it relates to giving people the opportunity to grow in their careers. Howard had five sisters and has four daughters and is probably one of the most insightful men I’ve ever met as it relates to women. He has been an incredible mentor to women inside of Walker & Dunlop, both executives as well as up and down the organization.

That’s created a culture at Walker & Dunlop that’s made it so that… I mean, when I joined Walker & Dunlop, it was a very male dominated culture. The mortgage finance business, the commercial real estate business, is dominated by white males, dominated too much. Howard got that and gets that and has done huge things to make our company and our industry more diverse. I think the other piece to it, Robert, that’s been really fun is to see people who leave another firm and come to W&D, and they just immediately see the difference. We have a new banking team again in your neck of the woods who joined us from one of our big bank competitors. I won’t throw the big bank competitor under the bus on this one. But within two weeks I got a phone call from this banker just saying, it is dramatic the difference in the way that people treat one another, the way I get resources, the way I engage with my colleagues being at W&D versus the big bank that he and his colleague came from.

Once they see that, they then become a part of it and then go and espouse it, and they replicate it and they bring other people into it. It’s sort of like a flywheel, as Jim Collins says, it just builds on itself. There are a couple things that we’ve done that have been really important over time that have maintained it and renewed it and made it grow. But at the end of the day, it’s really finding great people.

The final thing I’d say on it is we’ve acquired 16 companies, and I would say to you that 15 of the 16 have been unmitigated successes. One of the main reasons they have all been such great successes is that we found companies that wanted to become part of Walker & Dunlop. We’ve never, ever bought a company at auction. So investment bankers who might be listening to this, bringing us a book on some company that’s out for auction is not a good play because we’re not going to aggressively on a company that’s being auctioned. Then I would say the one acquisition that didn’t work was because we didn’t have a cultural fit. That was our mistake. It was my mistake.

It was my mistake. I take full responsibility for it because every single company that we’ve acquired, I’ve gone and spent time with the CEO to make sure that he or she wants to become part of W&D and bring their team across to W&D. On this one, I misread it, and it was painful. We had to retool the senior management team and do something to make sure that we held the asset that we bought, but that was a mistake of culture, not necessarily the operations of the company.

Robert Brunswick:

Well, I appreciate the reference to Co;llin’s Good to Great, and you clearly have done that in the build out of your company. I think that je ne sais quoi, as they say, is culture and it’s seen in your offices. So hats off to you.

We’re going to start to dive down a little bit now into market conditions and what’s… But first of all, frame a little bit, you’re the largest provider of capital to the apartment industry. Can you explain Fannie Mae and Freddie Mac, how they work within your business and more specifically your fiduciary responsibility there? I’m going to say the risks may be associated with that responsibility as you build out your AUM, assets under management.

Willy Walker:

There’s a lot in there. Let me go 30,000 feet and then I’ll drop down to five, if I can. At 30,000 feet, as many people who are listening to this know, Fannie Mae and Freddie Mac play an incredibly large role in the US mortgage finance industry, both single family and multifamily. On the single family side, Fannie and Freddie are sold about 80% of all single family mortgages originated in the United States. A lot of people forget this, but we are super blessed in a rising rate environment to have Fannie Mae and Freddie Mac on the single family side. Right now, it’s interesting that the 80% number parallels the stat I’m about to say, but this stat is correct. It’s not just me conflating two stats. There’re about 80% of the total mortgage industry, and today 80% of American homeowners who own a home have a fixed rate mortgage under 5%. The only reason that they have that fixed rate mortgage under 5% is because Fannie and Freddie.

If you are in Japan, Canada, or the United Kingdom today and you owned a home, you typically will have a short-term floating rate mortgage on your house. You’re right now getting absolutely strangled by the increase in debt service coverage. So one of the great benefits we have in the United States, and the reason the consumer has held up so strong in this rising rate environment, is due to the presence of Fannie Mae and Freddie Mac in the single family mortgage market.

On the multifamily side, Fannie and Freddie have about 40% market share, so about not quite half the market Fannie and Freddie lend on in the multifamily industry. We are the largest provider of capital for Fannie and Freddie. We’re number one with Fannie. We’re number three with Freddie. On a combined basis, we’re number one. There are a couple of things about that program that are very distinct from the single-family mortgage market. The first is access to Fannie and Freddie is limited in the multifamily space where it is not limited in the single-family space. In other words, any originator of a mortgage on the single-family space can turn around and as long as it’s a conforming loan, they can sell it to Fannie and Freddie. In the multifamily side, in commercial, you must have a license to work with Fannie Mae and Freddie Mac to lend on apartment buildings. There are only about 25 licenses with Fannie Mae and 25 licenses with Freddie Mac. So access to that market is limited.

Then once you gain the market share and scale that a Walker & Dunlop has been able to gain, it’s very hard for other competitor firms to break in. I look at the business, Robert, very much similar to your business in the sense that it’s once our bankers create a relationship with a borrower, it’s really more of a private wealth management business. Once you create the relationship, people really don’t want to move from one Fannie Mae lender to the next or one Freddie Mac lender to the next. So once you built up that confidence level and relationship, it’s an annuity. Those people typically stay with you. So as we’ve gone and built this scale, it becomes a very, if you will… It’s got a lot of barriers to entry. Now I’m going to Michael Porter from Jim Collins, but it’s got a lot of barriers to entry in that there are only a certain number of licenses.

Then inside of that, once the bankers create the relationship with the borrower, it’s very difficult for third parties to step in and dis-intermediate that relationship. So that’s allowed us to continue to scale and bring on great banking and brokerage talent to continue to grow with the agencies. Then finally, to your point about a fiduciary responsibility, on loans that we originate for Fannie Mae, we take the first lost position.

Robert Brunswick:

There you go.

Willy Walker:

So very, very different from the single family mortgage space, which got everyone including us as taxpayers into significant trouble back in 2006 and 2007 where single family mortgages were underwritten, the underwriting was falsified, and those loans were then sold to Fannie and Freddie and we had the collapse of the mortgage system. First of all, I can guarantee everybody out there that all of those failings of Fannie and Freddie’s single family business back in 2006 and 2007 have been fully cured and that their protocols and processes and procedures will make it so that we are not going to have the same type of mortgage crisis in the future that we had in 2007 and 2008 when Fannie and Freddie went into conservatorship.

The second thing is that by us taking the first lost position on every loan that we originate for Fannie Mae, as you can imagine, it makes our underwriting exceedingly rigorous because if that loan defaults and we start losing money, it’s all Walker & Dunlop’s money that goes out to pay the bondholders for the loss. So the alignment of interest that Fannie Mae puts into that program, I think is the securitization model. I think it’s the very, very best. Now, Freddie Mac removes a Walker & Dunlop who originates the loan and brings in big institutional investors to buy that first lost position and those institutional investors underwrite the loans that we originate, just like we would underwrite the loan when we’re originating. So in both programs, you get private capital taking the first lost position on all the loans that Fannie Mae and Freddie Mac securitize, and they’re basically selling off the A piece and the B piece is either held by Walker & Dunlop with Fannie Mae or held by a third party institutional investor with Freddie Mac.

That alignment of interest with private capital being in front of public capital is what has made Fannie and Freddie’s multifamily lending programs so successful and had both of them have the minimus loan losses, even when markets get tough like they are today.

Robert Brunswick:

Beautifully framed and explained. Thank you. As you talk about tough markets today, I think about today’s headline news. I mean, daily, it continues to catastrophize today’s commercial real estate industry. So I’m of an age where I can go back to the RTC, the Resolution Trust Corporation of the nineties or certainly GFC, the Global Financial Crisis of 2007 to 2008, and think about those as really extreme times in the cycles of real estate and just capital markets.

But help us gain some perspective on today’s market and maybe contrast to those and these headline news articles that we read every day.

Willy Walker:

So I think, look, 2023 has been a fascinating year, Robert. I mean, it’s been a fascinating year. I was on CNBC in May, and as you recall, that’s just after SVB and Signature Bank had both gone under, a lot of pressure on PacWest at the time. As we all know, PacWest is now part of Bank of California. But there was real fear that we were going to get a run on the banks. I don’t know about you, but I haven’t heard anyone talk about a run on the banks in months. So we went from what was looking very much like potentially a redo of the Global Financial Crisis to six months later there’s nobody talking about solvency in bank portfolios anymore, nobody.

At that time I was asked, “Is this a solvency issue?” I’d read a number of research reports. The most insightful I thought was a J.P. Morgan research report, which basically stress tested the you know what out of bank balance sheets as it relates to their exposure to commercial real estate. What it showed was they all had plenty of tier one capital to be able to withstand massive, massive losses. So it wasn’t a liquidity issue, it wasn’t a solvency issue, it was just an earnings issue. I was very straightforward in saying in that interview on CNBC, “It’s not a solvency issue, it’s an earnings issue. So if you’re concerned about earnings of Wells Fargo, you might want to take a look at their commercial real estate book because it’s got a lot of exposure to office and it’s going to have losses. If you’re concerned about Wells Fargo going upside down and need a bailout, you should not worry about it as it relates to their commercial real estate exposure.” Now in hindsight, that was exactly right, but few people really wanted to dive in and take a look at that.

Stay on that May view, Robert, as it relates to the overall capital markets. In May, remember this was pre-debt ceiling negotiation, which the former house speaker had successfully gotten us through, but a lot of people were sitting there saying, “We’re going to hit the debt ceiling. We’re not going to be able to issue debt.” At that time, the forward curve was projecting a recession for 2023 and that the Fed would cut rates, be forced to cut rates, and that we would have by the end of the year, a 375 Fed funds rate. 375 Fed funds rate was the forward curve in May. So we had a lot of borrowers who sat there and said, “Whoa, great. We’re going to go into recession. Fed’s going to be forced to cut. I have a refinancing that’s coming up in November. I’m going to wait to do it because the Fed’s going to have to cut and I’m going to get a much better deal then than I am today.” Wrong move. The forward curve has consistently been wrong in this tightening cycle. It has consistently been wrong.

So now look at where we are today. So today, I just asked for it this morning, the forward curve has the Fed funds rate a year from now at 412. So okay, look at the forward curve. You say, “Great, the market right now is saying we’ve got four rate cuts coming in 2024 and the Fed funds rate’s going to be at 412 a year from now.” What’s changed that dynamic? Because in May the view was we go into recession and the Fed is forced to cut rates. Now it’s the Fed is going to get to their target inflation number and have the option to cut rates. They’re not going to be forced to, they’re going to do it because they don’t need to have a 525 Fed funds rate, they can cut. Honestly, that takes a lot of things to continue to work perfectly, and the world is trading right now, the markets are trading on that assumption, if you will. The only thing that really changed in that last CPI print was rents.

So now I’m bringing it all back to real estate, but one of the big lagging indicators in the CPI has been rents. Rents, both single family and multifamily, are 40% of the CPI. Huge, huge portion of the CPI. As you and I both know, that data point in the CPI lags. So in this last print, all of a sudden the rent deceleration, if you will, or deflationary pressures finally worked their way into the CPI. In the last three weeks, we’ve seen the 10-year treasury rally by 70 basis points, and we saw the equity markets explode to have one of the best Novembers the equity markets have ever had. That’s all based on the CPI continuing to go down as that rental input as a lagging indicator keeps pushing it down. There’s a question mark behind that. We clearly see on the multifamily side that rent growth has gone out of the market and you’re seeing rents go down in many, many markets across the country. So I don’t doubt whether rents have lost their inflationary pressure. The question is does it keep tracking and do other inflationary components stay there?

Because my fear, Robert, is this, the markets were doing the Feds work for it. A 5% ten-year treasury was slowing down the economy, clearly from a commercial real estate standpoint it froze the market, and that made it so that the overall market was doing the Feds work for them. Now all of a sudden, we’ve had a big rally in the ten-year, we’ve had a big rally in the equity markets, and it’s all predicated on the Fed being able to get to that 2% inflationary target. If the markets have turned and they don’t keep tracking to it, I wonder whether rather than cutting in ’24, they actually have to raise again in ’24. I don’t think anyone’s talking about that and I’m not… Look, my fingers and toes are crossed that we continue to track down on this inflationary number getting down to their 2% target and that the Fed does have the luxury to cut in Q3 of 2024.

If that scenario keeps going, equity markets are going to roar. The debt markets are going to continue to rally in commercial real estate will also continue to rally. But that’s got a lot of scenario, that’s got a lot of data points to it that all have to continue to track for us to avoid the Fed saying, “Guess what? This thing’s too hot. I got to step back in again.”

Robert Brunswick:

So Willy, you’re one of the leading lenders in America. We have $2 trillion worth of expiring debt coming our way here in the next several years. We know that the banks were the, I don’t know, a 40% participant in that debt stack. So how does this get played out? You certainly laid out the public policy and rates and economy, which will have some benefits depending on the route it goes. So who’s going to refinance all this? What’s going to be different this time? What did we learn from these GFC and RTC debacles that might make some of that recapitalization and refinancing a smoother path?

Willy Walker:

I think the big difference is that we’re not… I mean, there’s nothing, there’s no parallel today to the GFC. There’s no parallel. The Fed, my friend Kevin Warsh was on the Federal Reserve Board back in 2008. Kevin and I had lunch back in November of 2008, and he looked across the table at me and he said, “Wills, we’re looking in the abyss and we can’t see the bottom.” There’s nothing remotely close to that right now. The Federal Reserve is literally sitting there saying, “Everything we’ve done is working and we’ve got the option to either step in or not step in.” That’s fully different from where we were in 2008. Do we have distress? Sure. To your point, and exactly right, they’re varying numbers as it relates to the amount of debt that needs to be reified over the next two years, but two trillions a pretty good number.

The issue with it is that there’s no pressure on the banks right now to foreclose on properties. So office is a real problem. I mean, office is a real problem. Nobody wants to be an office owner today. At the same time, banks don’t want foreclose on an office owner. They want to work with the office owner to make it so that they can continue to own the building and renovate it if they need to renovate it and bring in new tenants if they need to bring in new tenants and get through this cycle. So the one area where you don’t have a lot of discretion is in the CNBS world and there’s a bunch of CNBS paper that is rolling. As a CNBS special servicer, you have a fiduciary responsibility to go in and work that loan out. So a lot of the specials right now are saying, “If you’re willing to re-equify the deal, we’ll work with you. But if you’re not, we’re going to foreclose on you.” It’s pretty bright line there.

But I keep teasing this Bloomberg writer who every single article he writes on office talks about three defaults that Brookfield had out in California and one default that Blackstone had out in California. I’m like, you might want to move off that because those were those four assets you talked about in January of 2023, and you keep going back to those same four assets that went to special servicing in January. I’m not trying to belittle the fact that there is distress in the office space, but the bottom line is that there’s plenty of capital to work on it. Hear me clearly, there will be losers. People will lose money, but it’s not going to be a contagion effect that impacts the entire market as many people feared. The banking crisis we saw in May could have turned into a legitimate banking crisis that then could have had a contagion effect on the entire market and on the commercial real estate industry. We are right now well beyond that. So barring any other type of major blow up, I think we work through this inventory.

The other thing I think that’s important to keep in mind, and this really well, Robert, is commercial real estate is a slow-moving train. If you look back to our experience in the GFC, we hit peak defaults. Remember GFC hits really in 2008. Fannie and Freddie went into conservatorship in October of 2008. Lehman Brothers went under in October of 2008, early November 2008, right around there. So you think about that as far as timing, that’s where the GFC hit its just worst point, no liquidity, world is coming to an end, unemployment rate goes up to 9.5%. Remember we’re at 3.7% today. 9.5% unemployment in the United States at its peak in 2009. Our peak defaults, delinquencies, excuse me, delinquencies in our portfolio hit Walker & Dunlop in Q2 of 2010. That was where we hit peak delinquencies in our loan servicing portfolio. At that point we got to about 1.6% of our at-risk portfolio was delinquent in Q2 of 2010.

But guess what also happened in Q2 of 2010, the market started to heal. Right then the market started to accelerate and lo and behold, properties started to get back on paying us and we moved through 2010 into 2011. Our accumulated losses from the GFC turned out to be, I think it was 16 basis points, 16 basis points. But it’s just important for investors to remember that these things don’t all happen at the… You might have crisis. You hit crisis in 2008 from a liquidity standpoint that plays through to rent rolls and to people paying us in Q2 of ’10, fully two years later. Then the market had kicked back in so that those properties got back to paying and we ended up with aggregate losses of 16 basis points in the portfolio.

So I think it’s very important for people who invest in real estate to understand that there will clearly be losses. We took 16 basis points of losses, but at no time were those 16 basis points of losses anything that would put Walker & Dunlop at jeopardy or hurt us from an earning standpoint or from an overall solvency standpoint to the point where it got being a painful moment. So I just think that that’s really important for people to keep in mind as it relates to bank exposure to commercial real estate, as it relates to these debt funds.

I will say the debt funds, the MF1’s and the Arbor’s and a bunch of other debt funds that went out and did a bunch of floating rate loans in 2021 and 2022, I just looked at a piece on some of the CLO’s and, I mean, the numbers look scary bad, like 0.67 average debt service cover on one of those two companies that I just pointed to of their entire CLO portfolio right now, 0.67 coverage. I mean, all that stuff is terming in ’24 and ’25. It’s going to have a hard time being reworked with the existing owner, so that then says the asset either needs to be sold or they default on the loan and then someone’s got to step in and work it out. But all that stuff takes time to work out. So those two lenders have $9 billion of floating rate loans that mature in 2024. I think a high percentage of those default and that’s going to be opportunity for fresh equity to come in and rework those loans.

But clearly $9 billion at default, even if every one of them defaulted, which I’m not in any way thinking will, that’s not material to the market. It’s clearly material to those two lenders, but it’s not material to the market.

Robert Brunswick:

So Willy with our remaining time, and I want to be mindful of your schedule, we’ve been in your wheelhouse and the passion is showing and the conversancy is well pointed. I want to talk a little bit, a small percentage of your business is office, the conundrum of office usage, the paradigm of it, married with the capital side of it. There is no bid right now. There’s no capital that wants to play there. Investors are certainly aware of the pending opportunity.

But how do you see office playing out from an office usage standpoint? What do you mandate, tell, encourage your employees? Are you reducing your footprint? Are you planning for more work from home activities? Share a little bit about your perspective regarding office.

Willy Walker:

So we have no risk on office, so I’ve got, if you will, no dog in this hunt.

Robert Brunswick:

That’s why I’m asking.

Willy Walker:

Yeah, no, but I have a dog in the hunt in the sense that I’ve got a pretty sizable company with people across the country and, I think, we have offices… I think we have something like 45 offices across the country. So we’re a pretty big tenant. I’m a big believer in office as it relates to culture and training and teamwork and learning. I think that I salute people like Jamie Dimon that have come out very forcefully and said, “Everyone at J.P. Morgan needs to be back in the office. If you’re not back in the office, you’re not working at J.P. Morgan.” I salute that. Jamie is unique, I think, in having both the leadership capability, the brand and the company to be able to do that. Lots of others who tried to follow suit on that haven’t been nearly as successful as Jamie has been.

At Walker & Dunlop, we mandate three days a week. But also, as I said to you when we were getting on this before we went live on the recording, if I’m in Denver on a Friday, I’m in the office. If I’m in Denver on a Monday, I’m in the office. My office in Denver is filled with people. I think that getting people back to the office is going to require leadership from senior management, but you’ll never convince me that working remotely is as beneficial to someone who’s trying to build a career as being in the office. You learn too much, you engage with people too much, particularly given that what we’re a service economy, Robert, this country is a service economy. 8% of our economy is manufacturing, maybe close to nine, but we’re a service economy. That means every company, whether you’re in hospitality, whether you’re in retail, whether you’re in money management like you, whether you’re in the mortgage lending business, it’s all service.

The only way you provide services to people is to understanding how to engage with people and learning that business by being trained with other people. So look, I love the optionality of having gotten stuck on some Zoom calls this morning and not being able to break at nine o’clock and dart into my office to be able to do this with you. So therefore, I called my office and said, “I’m not coming in today. I’m going to work from home.” It’s wonderful. I mean, it’s great to have the flexibility to do that. At the same time, it’s not my default mode because I know when I’m in the office that I’m learning and the people around me are learning from me as we engage on things.

I think where we’re going to find… What’s going to happen is that as the economy slows a little bit and we’re not at 3.5% unemployment and people can’t just jump from one job to the next. As bonus compensation comes down, people are going to sit there and see that one of the differentiators as far as people who are being given bonus compensation and being given opportunities are those people who are showing up. That may be a very old school way of looking at the world, might be. I don’t think it is in the services businesses, I just don’t. I think you learn too much through osmosis. I think you learn too much by the water cooler talking to somebody about how you found an opportunity, how you approach something, and getting off of just the, here’s the agenda for the call and here we go.

If you and I didn’t our time before the Zoom call to just catch up on some light things and we’d come in and gotten right on this agenda, the only thing you and I would’ve talked about is what you want to talk about in this podcast. We wouldn’t have talked about biking. We wouldn’t have talked about the softer things that connect you and me as individuals. So I think office has a resurgence.

I think that we’re at that flexion point where people are trying to figure out what to do with it and how people get back to office, but we know that A class office is being leased at rates that are higher than it was previously. We know that people are developing new class A office because everyone wants to be in great places. We’re moving into a new office here in Denver. I am super excited to move into our new office building here in Denver. It’s going to be an amazing office space and we’re going to have a great culture inside of that office, and I know that we will compete better in that new office space than we do today. I know it and I’ll invest in it. I think that there are lots of CEOs who will continue to invest in that.

Then there’s always going to be the ability for people to work remotely. We’ve got a lot of people who work around the globe. We don’t have a Walker & Dunlop office in some of the cities where they live and work. It’s fine. We get access to great talent, but we’ve got to make sure that they feel like they’re part of the W&D team, which is… The final thing I’ll say on this is, it’s why we’re spending a couple million dollars to bring our whole team together in May of this coming year to do an all company meeting. It’s a huge investment, but to me, to bring the whole team together for a couple of days and be able to celebrate our success and engage with people who you only Zoom with on a consistent basis is super fundamental to growing and cultivating the culture that we’ve been able to build at Walker & Dunlop.

Robert Brunswick:

You’re rallying me Willy. As an owner of office, I’m enthused, but I love your passion for this. So I want to get you off of the W&D platform for just a second. I want to touch upon you as a leader and affecting more than just a business. I’m thinking about your podcast and the deep dive. I’ve enjoyed listening to you. You don’t just talk about real estate. It’s business, it’s economics, it’s leadership, it’s our world, things that impact our world societally. I have to imagine most of your listeners are not real estate clients. So this has really taken a turn, this podcast where you’re a thought leader in a very significant way.

So just what does that mean to you? Where does it take you? What responsibility do you feel to have that mantle now that was a byproduct of the pandemic and you wanting to just share with your team and some of your customers?

Willy Walker:

So first, Robert, as you know, because you’ve done your homework on me for this discussion and you’ve done it extremely well, it takes a lot of time. If you really want to know your guest, you got to do the homework yourself, so I don’t get a briefing book on my guest on the podcast. I do all the work myself. I’ve had plenty of people challenge me on whether I ought to be investing at a minimum four hours a week and probably at a maximum seven hours a week on getting ready for my guests. But when former US Ambassador to Israel, Tom Nides calls me last week after we’d done the Walker Webcast three weeks ago and says to me, “Of everyone who has interviewed me on the Israeli, Middle Eastern, Hamas issue, you knew more about the issue than anybody else.”

Robert Brunswick:

Well done.

Willy Walker:

I say, “Well, that’s what I owe someone like Tom Nides who’s going to take the time to talk to me, right?” I got to do my homework. I got to be really well-prepared. He didn’t like a couple of the questions I asked him. I said to him afterwards… He was giving me a hard time on it. I said to him, “Tom, when I brought up the sanctions that the Trump administration put against Iran and asked about the Biden administration loosening those sanctions, and you jumped all over that and talked about how the Biden administration’s maintained them, I gave you the opportunity to do that. Don’t sit there and say that I was bringing up some tough issue. You dove into it and you fully refuted that statement, which by the way, Jared Kushner and the Trump administration are out there talking about all over the place. So you should be able to address it and talk to it the way that you did.”

So it’s a lot of work, but I mean, it makes me so much better. There’s not a conversation that I study for that somehow doesn’t come back into W&D, whether you… You named Ginni Rometty, the former IBM CEO. I mean, I did my homework on Ginni and I brought back to my senior executive team on the Monday after I’d done my research over the weekend, five different ideas on things that Ginni had done at IBM that we might think about doing at Walker & Dunlop.

President Biden was here in Denver two days ago, and just because of the work I did with Larry Sabato on JFK’s assassination, I’m sitting there and we’re watching this massive motorcade come down the road underneath our offices. I say to everyone in the room, “When Kennedy went to Dallas for that fateful trip, he had 28 Secret Service agents with him and only 12 Secret Service agents were actually in the motorcade with him.” We’re sitting there looking at this just sea of police officers and Secret Service agents and all this stuff, and you could just get this sense of, wow, we’ve come a long way as it relates to what we need to do to protect the leader of the free world.

It’s those kinds of little things that just are so fun and that’s just a data point that doesn’t make Walker & Dunlop better, but it certainly is informative to the overall world we live in and what have you. So I take it super seriously. It’s been great. People always ask me, “How long will you do it for?” I’ll keep doing it for as long as people will keep on coming on and find it to be engaging and insightful.

Then the other piece to it is what’s it done to the Walker & Dunlop brand? I mean, there’s nothing, and I mean nothing, Robert, that we could invest in from a marketing standpoint that would give us the mind share that we get from the Walker Webcast, nothing. I’ve tried everything. As you can imagine, given the growth of Walker & Dunlop, we’ve done all sorts of things. We’ve done wide ad campaigns. We’ve sponsored golf tournaments. We’ve done this, we’ve done that, and there is absolutely nothing we could do that can replicate the general… What I call it is lateral marketing. So before the Walker Webcast, all of our marketing was direct marketing. Let’s go to a conference and meet someone and say, “You should work with Walker & Dunlop.” Let’s go to someone’s office and meet with them and say, “This is why we’re really good.” All the things was like, you need to work with… Here’s a pamphlet that shows all the deals we’ve done. That’s direct marketing.

The Walker Webcast, because we’re not talking about W&D, we’re not trying to sell W&D’s services, is what I call lateral marketing. Nobody comes on and hears me say, “Buy a loan from Walker & Dunlop,” or “Sell a building with Walker & Dunlop,” ever. As a result of that, what it’s done to the overall brand… As you said, the majority of people listen to it, lots of people in commercial real estate listen to it, but a lot of other people don’t. But they listen to it and then they talk to someone else and say, “Hey, do you know the Walker webcast? You ever worked with Willy Walker? You ever worked with Walker & Dunlop?” I cannot tell you the amount of business that’s come through that sort of lateral referral network that’s come into W&D.

Final point, I’d say, I said to my chief operating officer who has marketing reporting to him, I said, “It’s hard to quantify how much the Walker Webcast has helped us as it relates to growth and market share and this and that.” He said, “That’s an easy one. Take a look at our overall market share from 2019 to 2023 and how our aggregate market share and multifamily has gone from 9% of total lending to 10% of total lending to 11% of total lending to 12% of total lending. You’re not going to tell me that a company that was stuck at 8% to 9%, that’s moved from 9% to 12% doesn’t have a direct correlation to the Walker Webcast and getting into the eyes and ears and minds of potential clients.” I looked at Steve and said, “I hadn’t locked at it that way, but you’re exactly right.”

Robert Brunswick:

Well, as we wrap, and you’ve been so kind with your time and all those remarks, and by the way, thank you for the webcast. I listen to it every time I just bought Jenny’s book, with your prompt.

You’re going to wrap up Willy by telling a hypothetical group of college students words of wisdom you might provide for them as they embark on their journey as a takeaway for some of our younger listeners. What might you share?

Willy Walker:

Oh man, that’s a whole different… Robert, you and I could sit around for an hour and talk about our collective thoughts on that one. The one thing that I consistently say to young college grads… And as you and I talked beforehand, I’m going to Chapman University in your backyard on Tuesday, give a speech there. I think the message that I try and say… Steve Jobs gave that commencement address at Stanford years ago, Robert, where he said, “Do what you’re passionate about. Do what you love doing.” It sounds great, but very few people have the ability to do something that they woke up one day and said, “That’s what I want to do.” I mean, I had to be told I didn’t want to be a consultant before I didn’t become a consultant, if you will, right back to the original story we said on McKinsey, right? I thought being a consultant sounded like a great thing and it would use my skills really, really well. Thankfully I met that guy who said basically, you don’t really want to do that.

I think the one thing that I have been blessed to do and see people do is to take every experience for what it is, which is a learning experience. I always talk about having gone to Morgan Stanley for the summer between my first and second year at business school thinking I wanted to be an investment banker. Morgan Stanley gave me an offer after that summer and I felt very privileged that they gave me an offer. There were 20 of us in the summer associate program and only five of us got offers to go back. But I realized in that summer that being an investment banker was not the best use of Willy Walker’s time and efforts. What I try and say to them is, that’s not a waste of time. That’s actually wildly valuable. I got to spend three months figuring out what I didn’t want to do and then turned around and said, “Now what do I want to do?” So I am big on saying try things and be really, really honest with yourself about what you’re good at and what you’re not good at.

When I first came to Walker & Dunlop, I was still insecure enough and just scared enough that I didn’t want anyone to know that I couldn’t do everything. So I tried to do everything because I wanted everyone to think that I was like this Teflon man who could do like everything. Wrong. Wrong, wrong, wrong, wrong. Figure out the things you’re good at, focus on those and do more of them. Figure out the things you aren’t good at and make sure you’ve got colleagues, friends, partners who can take care of those things for you. That takes some maturity. But as people move through their careers, they’ve got to be honest with themselves.

When I was at Morgan Stanley, Robert, I would sit there late at night with my Excel spreadsheet up running numbers on companies and I would watch my colleagues in the summer associate pool just build models that I could never dream of making, not dream of making. Could I do an Excel model to give you a DCF and give you the actual number? Sure. But these people love that side of finance. I sat there and said, “I’m never going to have that finance capability that that person sitting next to me does. This probably isn’t where I should try and build a career.” At the same time, I could walk into a meeting with a client and talk to the CEO and the CEO thought I was the greatest guy in the world and had all these ideas about the companies that I’d already built and messed up or done well with. We had a really good view from a general management standpoint.

So I’m like, why am I going to go into a career that requires me to be an expert at Excel spreadsheets when there are lots of people who are much better with Excel spreadsheets than I ever will be? Why not focus on the part of the business that I really like, which is leadership and strategy and growing businesses? So it was that realization that allowed me to say, “No, I’m not going back to Morgan Stanley,” and to stay doing things that I really should have been doing. I think a lot of people get channeled into a career and don’t stop and sort of say, “Am I liking what I’m doing and am I good at what I’m doing?”

The final thing I’d say is that’s very different from Steve Jobs saying, “Do your dream.” It’s very different from Steve Jobs saying, “Do your dream,” because very few people have the ability to just say, “Hey, I really want to do that. I know exactly what I want to do with my life and I’m going to go do it.” Doctors can do that. Lawyers can do it from a training standpoint, but may not actually know what law is all about. But it’s very unusual for people in the business world, at least from my experience, to sort of wake up one day and say, “You know what I really want to be? I want to be an investment sales broker for multifamily real estate.” They get there because they’ve gotten the training and all of a sudden say, “I’ve got the capability to go do it.” If they’re good at it, they can build a career there. But that only comes from learning a lot, trial and error. Then the final thing is having really good mentors.

I have been blessed to have a lot of really good mentors. So one of the things that I consistently say to young college grads is, if you go into a job, make sure you are finding people who want to take an interest in your career because if you don’t find a mentor… That is part and parcel of having a successful career. If you’re a lone wolf and you don’t have people who are working for you to get to that next level, it’s a pretty lonely trip.

Robert Brunswick:

Perfectly said, and a nice way to wrap. I can’t thank you enough. I would tell you, I’m sure you gained here today, a bunch of new Walker Webcast participants from our group that would love to continue learning from you.

Who do you have coming on with your next Walker Webcast, out of curiosity?

Willy Walker:

I’ve got David Faber from CNBC.

Robert Brunswick:

Oh my gosh.

Willy Walker:

I’m going to New York next week. David and I were just going back and forth today about what we’re going to talk about next week, but similar to, if you will, you turning the mic on me, Robert, on this one, David knows so much about the markets, but he always is asking the question. One of the things that I find, as just like you asking about me, I could turn around and ask you questions about your own career and also how it fits into your questions to me. David sits there and knows so much about the people he interviews, so much about the markets and everything else. Yet nobody ever asked David for his viewpoint on it. I mean, he and Kramer go back and forth on the set about this and that, but the point is turning the camera on David and getting David to talk about what he sees.

I can’t wait to talk to him about the Elon Musk interview that Andrew Ross Sorkin did at DealBook this week. Because David went out and did a great interview with Elon Musk probably six months ago. That was very, very news making, then Andrew just came out with the one, as you probably saw, talking about Elon Musk giving the big old middle finger to advertisers who don’t want to advertise on X. For the life of me, I can’t imagine how he gets any momentum in people coming to X. I just don’t get it. I guess, when you’re as rich as he is and everything you touch turns to gold, you don’t really care about a $40 billion investment. But that poor CEO who’s come in to try and turn that place around with an owner, and I don’t know whether he’s actually chairman, basically giving the middle finger to Bob Iger and any big advertiser, it just defies logic.

Robert Brunswick:

He’s going to want to rethink that move, walk that back. But Willy, thank you. You got a bike, by the way, when you come out here and a couple of great courses, I’ll take you on for a ride. I want to thank everybody for joining us for County Capital, and we’ll see you at our next episode. Thank you very much.