Walker & Dunlop cut more than 100 employees this week as the brokerage’s expectations for a commercial real estate recovery this year have dimmed.
The Maryland-based firm laid off 110 staffers, about eight percent of its workforce, according to a disclosure filed Monday with the Securities and Exchange Commission.
In a staff memo, chairman and CEO Willy Walker wrote that the firm’s outlook changed in recent weeks and pinned the continued downturn in the commercial real estate market on last month’s banking turmoil and the Federal Reserve’s efforts to control inflation.
“We held on to our entire team entering 2023 thinking that commercial real estate transactions would recover once the Federal Reserve stopped raising rates,” he wrote. “Unfortunately, with the Fed still raising rates, and the market disruption caused by the recent bank failures, we simply don’t have visibility into when market activity will return to normal and must take action.”
The company expects the layoffs to result in a net savings of more than $20 million this year.
As of Tuesday afternoon, Walker & Dunlop’s stock price had fallen to less than $69 per share, down from about $100 a share in early February.
Walker told employees the company has no plans to exit or “dramatically cut” any of its business lines as a result of the slowdown.
“We have the financial wherewithal and confidence in our future growth to continue investing in these businesses,” he wrote.
The brokerage joins other large commercial real estate firms that have had to cut back as investment sales have slowed to a crawl and office tenants have pulled back on leasing.
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CBRE, JLL, Cushman & Wakefield and Eastdil Secured have all announced cuts to reduce costs — some through layoffs, some in other areas of the businesses — as the market has slowed.
In New York, Walker & Dunlop last year acquired David Ash’s Prince Realty Advisors to build out its investment-sales footprint in the city.