Q1 2021 Walker & Dunlop Inc Earnings Call
Since we started it in March of last year.
The quality of the guest that we bring on the webcast and their insights provide every banker in broker at Walker and Dunlop with client touch points and market insights every week.
This is not only expanded the <unk> brand dramatically, but generated new business.
Just last week, we closed on a $37 million financing for a new client who listened to the Walker webcast send an email to our general mailbox was introduced to our banking team and got a terrific loan on their office building and paid us a $250000 fee in the process.
This transaction brought us brought to us through the combination of digital marketing branding technology and flawless execution by our team as part of the 27% of our total transaction volume in Q1 coming from new clients to Walker and Dunlop.
That is up from 23% for all of 2020.
The other technology proof point, we introduced in 2020, new loans to our servicing portfolio increased to 79% in Q1 of 2020 up from 66% for all of 2020.
So rather than simply refinancing the loans in Walker and Dunlop sizable $110 billion servicing portfolio almost 80% of the loans, we refinanced in Q1, where new loans to Walker and Dunlop.
Generating finance financing fees, and adding mortgage servicing rights to our loan portfolio.
The amount of capital targeting commercial real estate investments continues to fuel the acquisitions market.
According to Preqin commercial real estate focused funds began 2021 with a record $324 billion of dry powder.
Our robust investment and acquisition market.
And bind with a wave of loan maturities will drive healthy transaction volumes over the coming years.
<unk> recent investments and people as we continue to scale, our business and support our future growth.
During the quarter, we grew our team a banker's and broker's to 214 from 205 at the start of the year further increasing both our geographic reach with higher than Ohio, California, Texas, and Maryland, and our investment sales productivity abilities with the acquisition of student housing focused four point.
Even with the increase in compensation expense operating margin was 33 per cent inclusive other reserve release and 28 per cent without within our typical range of 28 to 30 per cent as non personnel expenses continue to grow at a slower rate.
We manage operating margin very closely and a confidence that it will remain within our expected range over the course of the year.
Return on equity was 19% and a quarter consistent with last year and within our expected range of 18 to 20 per cent.
Total transaction volume of $9 billion was down 20 per cent from the first quarter of 2020 as anticipated given that we originated the largest portfolio on our company's history at 2.1 billion dollar Fannie Mae transaction last Q1.
Notably we saw a strong debt brokerage volumes of $4.3 billion and a quarter up 8% from last year is very strong values indicative of an active market for commercial real estate financing cause is attracting significant amount of capital as we continue to progress towards the post COVID-19 environment.
72% of our debt brokerage volumes were multifamily compared to 94% in the year ago quarter, reflecting to pick up and landing on other asset classes.
To make sure by $7.6 billion of debt financing volume in Q1, 21 was skewed more heavily towards debt brokerage originations as compared to the first quarter of last year, primarily due to the large portfolio that I just mentioned.
Or heart volumes at 622 million, we're at 75 per cent from Q1 20, continuing the strong performance off of 20 twenties record year.
In addition, our interim lending program was very active in the quarter with $178 million of multifamily bridge loans originated through our JV with Blackstone and on our own balance sheet.
G S. Each other relatively slow start to the year is it carried over a lot of deliveries from 2020 into 2021.
Our market share with Fannie and Freddie remained above 11% and we expect that are overall volume will pick up over the next three quarters as the G. S. He's managed ideal flow to ensure that they use all of the remaining $105 billion of lending capacity for the year.
On the first quarter of 2020, when the pandemic was declared.
One year later, we have very few loans and forbearance on our portfolio has had no defaults related to the pandemic.
Reflecting the resiliency of multifamily and the quality of our underwriting and servicing teams who've done an expert job as manager or credit risk both before and during the pandemic.
Further evidence of the strong performance of our portfolio is if the debt service coverage ratio of the $50 billion of loans, we have risk on remained above two times at the end of 2020 consistent with the end of 2019.
Well unemployment rates are still relatively elevated at 6%. This is a significant improvement from the high of $14 seven per cent that we saw on April of 2020, reflecting the return of jobs across the economy.
The most recent stimulus bill combined with an anticipated full reopening of the economy by the ball and forecasted strong economic growth over the next year gives us confidence that the fantastic credit metrics me I've seen in the portfolio today will persist into the future.
We feel that the current level of the allowance at 64 $6 million is sufficient to cover any future losses that could arise in the portfolio over it's expected Romanian life.
We ended the quarter with over $277 million of cash on our balance sheet and another $62 million funding loans held per sale, bringing our total cash available to $339 million.
We are currently exploring the number of strategic acquisition opportunities that are in line with our drive to twenty-five objectives.
Investing in revenue generating technology and that initiatives and continuing to bring on bank and brokerage talent all of which is supported by our strong cash position today.
Yesterday, we announced the acquisition of 75 per cent of gentleman and associates bleeding housing focused research firm in the country.
A transaction is expected to close sometime in the third quarter pending regulatory approval we.
We expect the zelman platform to contribute between 15 and 20 cents an earnings per share in its first year.
While our focus remains reinvesting R capital back into the business do acquisitions like Zelman are strong financial position and the steady cash generation of our business enables US also to return a portion of our capital to shareholders Yes.
Yesterday, our board of directors approved quarterly dividend 50 per share payable to shareholders of record as of May 20th.
A quarter ago, we laid out ambitious goals for double digit growth in earnings per share and adjusted EBITDA for 2021.
Strong start to the year in terms of our financial performance credit quality and cash position and our expectations for the market opportunity ahead give us confidence that we will achieve both of those goals. Thank you for your time today and I will now turn the call back over to Willy.
Thank you Steve.
Along with delivering strong financial results. During Q1, we made significant progress towards our strategic objective.
Of our five year growth plan to drive to 25.
The overreaching goal on to drive the 25 is to grow revenues from $1 billion and 20 $22 billion in 2025.
Continuing to invest in people brand in technology, and our core businesses and building three new businesses in small balance lending appraisals and investment banking.
As I previously mentioned to become the largest provider of capital to the multifamily industry. We thought we needed to enter and grow dramatically are small balance lending business roughly half the multifamily loans originated every year are considered small balance loans low.
Most of the small balance lending is done by banks for our property owner may use the bank for checking and savings accounts and ask for a small balance multifamily low.
We see this market, where local regional and national banks are the incumbent lenders as ripe for disintermediation, using our brand technology and people if.
If you enter a bank branch office and ask for a small multifamily loan your loan officers are generalists, who could just as easily provide you with a boat loan as an apartment building one we.
We thank our focus and brand is the largest provider of capital the multifamily industry can win this customer over.
We have data and visibility into who owns these properties and we are building digital marketing strategies to capture clients attention.
We are also investing in technology to drive down the cost of underwriting a small balance loan.
We are acquiring a technology company that allows us to quote a small balance loan in just over a minute.
And also streamline the loan application underwriting and closing process.
<unk> also completely revamped our small on origination team, bringing in new leadership and establishing a regional origination model that we believe will allow us to originate higher volumes of loans with fewer people.
Through our multifamily appraisal business a prize we have quietly built out our license appraisers across the country and are now capable of producing by Ria compliant appraisals using more technology and fewer people than any competitor in the market.
A year ago, a prize produced 55 appraisals in Q1. This year, we did five X that volume and we intend to continue growing that number by multiples.
The use of technology in our appraisal business has broad applications and R lending and investment sales businesses as well.
The final growth area that we made significant progress on on Q1 is investment banking.
As our brand has expanded and our relationships with our clients have deepened.
Need for investment banking capabilities to meet all our clients needs has become more pressing.
Many of our banker's and broker's serve their clients and advisory capacities today, but as part of our drive to twenty-five objectives, we set a goal to formalize and expand our investment banking services.
To that end yesterday, we announced the acquisition of his element and associates, a wonderful boutique real estate focused research and investment banking firm.
Ivy Zelman, Dennis Mcgill and their team have built out what one of the most well respected housing research and analytics teams in the industry.
Salmon's research team covers both single family and multifamily housing and as these two industries collide in a single family homes for rent market <unk>.
Gentlemen, and WMD will be perfectly positioned to provide expert coverage of these markets.
Salmon's research and analytical capabilities, coupled with Walker and Dunlop vast data from our $110 billion servicing portfolio and technology investments.
Will provide the banker's and broker's at Walker and Dunlop with the very best insight into micro and macro markets across the country.
To enable their sales efforts.
It is our expectation that wmd's proprietary research and market insights will make us more relevant and valuable to our clients than ever before.
Zellman is a registered broker dealer and as a housing focused investment banking team that has an incredible track record in the M&A debt and equity transaction markets, including advising in the Ipos affirm such as rocket mortgage an invitation homes the.
The broker dealer in investment banking capabilities inside Zelman provide a fantastic launching pad for W. N D as investment banking business and the commercial real estate arena.
A couple of general comments before we finished the call and open the line for questions are.
2020 success.
Expanded brand and use of technology have fundamentally changed our ability to recruit talent to Walker no up.
I mentioned previously the power of the Walker webcast and attracting new clients to W. N D and it is doing the same thing with talented banker's and broker's at competitive firms.
And if you add to that equation being the largest provider of capital, though the multifamily industry and fourth largest lender on commercial real estate in the United States.
The opportunities for new recruits is vast.
But there is one point about our brand and digital marketing that is very important to underscore.
We have just begun to capitalize on what we have created.
I mentioned earlier in the call, how a new customer called us out of the Blue after the Walker webcast and gave US a 37 million dollar office building financing.
That is one of many examples where our brand is generated new opportunities for Walker and Dunlop.
But we have had over 1 million views of the Walker webcast.
Where there are thousands and thousands of potential clients and we have never met now interacting with our company and brand.
We will figure this out but we're just scratching the surface on how to identify and convert these new client touch points, and a new business and opportunities for growth.
As we make significant strides towards the strategic and financial components of the drive to 25, we remain focused on the environmental social and governance elements of our 2025 goals with significant attention being given to our diversity equity and inclusion efforts.
We recently launched a diversity initiatives called CRE, United in partnership with some of the largest players in the commercial real estate industry, including Fannie Freddie graced R. K K R can't Anderson and Pacific Life.
The alliance is working to identify the obstacles that minority C. R. A owners and operators face and implement real changes across the industry to break down these barriers.
Internally Walker and Dunlop is also.
Setting ambitious D and I goals, including increasing the proportion of women and minorities among management and top company earners by 2025.
As outlined in our recent proxy statement or compensation Committee will oversee our progress towards these ambitious longterm goals, which will be directly tied to executive compensation.
I've watched this wonderful company grow from one office in just over 40 employees into the national powerhouse. It is today and I must say I've never been prouder, nor more excited about all we are currently doing.
We established another ambitious five year growth plan at the end of 2020 and and just a few months, we have made real and exciting progress towards our goals.
We remain a great place to work due to the incredible people that <unk> that make W. N D. What it is.
We continue to invest in technology.
To enable our people to be more insightful more efficient and more productive in the competition.
And we continue to expand the brand using the Walker webcast and the insights it provides to expand our presence and thought leadership across the industry and country.
I want to thank our team for an incredible 13 months since the onset of the pandemic.
Our financial results and achievements in our pursuit of the drive to 25 speak for themselves and thank you to all of the investors and analysts to join US. This morning. This is an incredibly exciting time for W. N D and we're thankful for your investment and interest in our company will now open the line for questions.
Alright now open for questions gross time, if you have a question on the phone. Please press star nine or if you were on your computer. Please correct right hand on the bottom on your web caffeine.
Our first question is coming from Hungary coffee at Weber security.
Alright.
So like you <unk> can.
Can you hear me now we can <unk> good morning, everyone and thank you for taking the call of.
It does seem reading the text of your press release on Saturday of your card, let's that you're expecting more of an acceleration in volume as we go forward.
Can you give us some insights into what factors are gonna drive that and you know what the mix is gonna look like how much is gonna be a multifamily it how much it's going to be outside just just a general overview as to what that that <unk>.
Production is likely to look like.
Okay. Henry first of all great to have you on the call. This morning, Uhm second I think Steve did Ah.
A really good job of laying out where the various volumes were in Q1.
I think that as we look back on Q1 as you know uhm interest rates moved up significantly during the quarter and that interest rate movement made it so that uhm to have interest as a 10 year go from 90 basis points at the beginning of the quarter to 160 basis points by the end of the quarter had a lot of.
Borrowers and deals moving around during the quarter. We've been very pleased to see rates are stabilizing. This 150 to 170 range uhm for the past month and that in and of itself has started to accelerate deal flow. The second thing is as we pointed out the agencies had a slow start to the year on they had a big carryover of <unk>.
<unk> and day at the end of Q1 still had $105 billion of capital to lend between the two of them and as we all know they're gonna lend every single dollar they have and so we are set up for three very strong quarters between now and the end of the year given the caps at the agencies have to lend and given our mark.
<unk> physician uhm as Fannies largest partner and Fridays fourth largest partner the second largest agency lender in the country Uhm.
I would say the third thing is Steve underscored our investment sales business in the pipeline. There is extremely robust we're seeing a very active market uhm that rate movement in Q1 slowed some deals down as bar buyers and sellers, we're trying to find pricing now that we've been in sort of this 150 to one seven.
And let's just call on on 160, Chenier Treasury range for Awhile Uhm transactions are starting to happen at a very accelerated pace and then the final thing is you've got to think about Q1, 2022, Q1 2021 as it relates to capital to overall commercial real estate pre.
Pandemic all the capital sources were lending on multi.
Industrial office retail on hospitality and in Q1 of 2021, you only really had capital going to multi an industrial.
And so as Steve pointed out even though we did do more non multi in Q1 with our capital markets team in 2021, and then we did in 2020, which is a huge accomplishment.
<unk> capital starts to come back the office buildings as capital starts to come back to hospitality and is it starts to come back to retail on.
Our capital markets came across the country will see increased flows so all of those different things come together to say to us that things are accelerating accelerated pretty dramatically.
Well, what I was talking to the my homebuilding analysts James Mikael Us about the Zelman acquisition investment acquisition.
We started talking about some other zelman thoughts in the multifamily area.
Things like taking too empty stores, and ultimately turning them into apartments multifamily businesses townhouses et cetera.
It is there it as part of this transaction are independent of this transaction are you seeing opportunities in the sort of single family business that.
That.
Weren't there before for Walker, and Dunlop and it seemed to be there now.
So I'd I'd say two things on that one as we tried to articulate and they'll call. Henry we see the convergence of single family in multifamily and built for rent and single family rental space is something that is very exciting we have a huge number of Walker and Dunlop multifamily clients that are focused on that space and are investing in.
That space. There are also lots of single family Homebuilders from the other side of the market. If you will who are entering in in the single family rental and built for rent space. We don't have long standing relationships with those single family housing developers and owner operators Uhm Zelman dust and so as we have zellman.
Insight into both single family as well as multifamily and the single family built for rent space. We believe that we will be a much more relevant source of capital for the S. F. R BFR space.
To extend your question into does Walker and Dunlop get into the single family lending space that is not our intention out of the gate I watch what's going on in the single family lending space right now and how there is a everybody who had alone to be refinanced did it last year and so they are refinancing volumes of.
Come down significantly and how there is no pretended protection on those loans, they're great companies and the single family mortgage space, great ones, but they deal with a very different market dynamic and we do and as our slide in the presentation shows there is a huge opportunity over the coming five years for us to.
Refinance lots and lots of commercial properties and more specifically multifamily properties given the free payment protection did exist on almost all commercial real estate loans.
Could you could you have an offering on the single family.
Rental space, you know the <unk> not not not the residential business, we know that but you know in the single family rental space. The dynamics are very similar to multifamily and I think that's that's the focus on my questions. That's correct and there's a lot there to be done both on built for rent, which right now is being financed by.
Pennant Lee banks, and we are working on working with banks as well as life insurance companies to put capital out in built for rent communities and then also on single family rental those loans are ending up in securitization pools, Henry as you know and that's right down the middle of the plate for the bankers at Walker and Dunlop, who have done large to keep <unk>.
Pool Securitizations in the past with firms like Deutsche Bank, and Citigroup and others that are very active in that space right now.
Yeah.
So add to that you'd mentioned, specifically conversion you know other commercial real estate assets.
Uhm multifamily and yeah I would tell you anecdotally we are seen a number of requests on the equity side coming to our asset management platform at Walgreen's on lap investment partners. So certainly seen you'll have hotel conversions and some office conversions uhm happening in the multifamily space.
Thank you.
Yep.
<unk>. Our next question comes from gained remind me on K B W.
Thank you very much.
Just wanted to ask about Willy your earlier comments regarding M&A do you expect to consummate large scale emanate transactions as part of.
The drive to 25 said W days overall gross plants.
First.
First of all nice to have you on the call. This morning. Good morning, Secondly, look Steve pointed out that we have over $300 million of cash sitting on the balance sheet. Today, we have plenty of borrowing capacity as it relates to our overall debt to equity ratio at Walker non op EM and it should come as no.
Rise to investors that given our growth and given the.
The expansion of our brand that we have never had more inbound calls as it relates to companies wanting to be part of what we're creating and have created it Walker Dunlop as I mentioned in the call Jade from a recruiting standpoint, uhm I've been out on the road meeting with candidates. If you will who are at competitor firms and I have.
Never ever had more people make comments about how what we've created a walker and Dunlop is very unique in the marketplace. The use of technology is without a doubt.
Far far beyond our competitor I met with one team two weeks ago, who has done a full diligence cause they're leaving one firm and looking at US vs. Three other competitor firms and they have they have dived into the technology to see who really is giving them actionable technology that allows them to grow.
Willy gave the stat on how many new refinances came into our book and then you look at the net growth of the portfolio you can intuit that theres, a significant retention of our existing loans in the portfolio.
Thank you.
Some questions I've gotten from investors relate to the GSE multifamily origination outlook.
And when we look at the deliveries that they provided.
For the first quarter total is about $35 5 billion. So when you say that they had a slow start to the year I believe you're probably referring to.
The timing difference between rate lock, which is when Walker and Dunlop rec.
Recognized as revenue and deliveries, which is about I believe 45 to 60 days later than that.
So is that really the discrepancy there.
That's that's it in a nutshell Jed we if you look at there are.
Both agencies January and February deliveries, they were quite high and that's a function of business that was rate locked in 2020.
And carried over from a delivery standpoint into the first quarter.
Okay.
Thank you very much for taking the questions.
Thank you thank you Jade.
Thanks, John on our next question is coming from Steve Delaney at JMP.
Good morning, everyone and congratulations on on Zelman and Moreover, all you've done to position W. D. As the go to employer in the space, it's exciting to see.
In Q4 of 2020, yet they get delivered to Fannie Mae in January of 2021 and hit if you will dare accounting in 2021. So all the numbers are you on J just outline are exactly right the issue with it as as we got credit for them in Q4 of last year and then they take him into their cap analysis for two.
2021, as it relates to the outstanding amount of capital they have of $105 billion. We're super excited about that because we know that we well first of all we have seen a dramatic change in April from February and March as it relates to agency pricing on deals dramatic cause they both pulled.
[noise] back after having a lot of carryover they both pull back in February March they're both back in the market and very active right now and the second thing is that there's plenty of capacity there for us between now and December 31st two do are commensurate market share, which is Steve said, we held in queue wanted.
At 11 per cent on a combined basis with Fannie and Freddie we have grown or Fannie market share up to about 15 per cent at the end of 2020, Uhm and I'm I have all the confidence in the world that will do that much Fannie Mae business. If you will of their total 70 billion. This year, but it you know it comes at different times in the ear.
Clearly didn't come in Q1, that's fine no big issue and then the <unk>. The final thing I'd say, Steve is the Supreme Court should rule in the next week or two as it relates to the court case. They are at in December as it relates to the term of the FHFA director Uhm. It is everyone's expectation that the street in court rules on FHFA like a day.
On C O P D.
If the Supreme Court rules that way it is very likely from every conversation I've had that the bite administration ask director collaborate to step down and put you on a new FHFA director.
And so specifically to your question about will the FHFA director step in will the score card would be changed who knows who takes doctor Calabria seat when and if the Supreme Court rules the way that many expect them tool, but I would expect that whomever steps into that seat is very much more if you will <unk>.
S C. In there roll on the market, then doctor collaborators and while Doctor Calabria is establish very reasonable scorecards for Fannie and Freddie on their multifamily learning spaces I would just say that with a new director there's another bite at the Apple as it relates to how much lending Fannie and Freddie can do on the multifamily space and as you know as one of the agencies.
Largest.
Capital providers, and having very very long standing relationships of Fannie and Freddie as well as the regulator, we will be very active and talking to whomever is the new regulator, Fannie and Freddie as it relates to the need for their capital and where they're placing their capital.
But I I would also add though Steve that irrespective of whether the caps are changed or not you know it was Willy pointed out we will get our fair share and then some of the hundred and 5 billion that remains to be done and given our our footprint and capabilities you know as the <unk>.
Apparently market.
Rose this year from last year, we have plenty of opportunity to.
Get those loans financed by life insurance companies banks et cetera through our capital markets teams. So we feel very well positioned either way.
Oh, that's great color guys and Steve on your final point about capital market Street.
Yeah.
You guys I think way back maybe five or six years ago, you had I I believe you had someone.
Focused on C N B S conduit lending into private C. N D S.
I mean, I guess eventually depending on what FHA FHFA does it would seem that is something that you could.
Ah capability, you could certainly add to serve your customers you know in a in a broader way beyond the agencies.
Yeah, that's exactly right, Steve Uhm, we have many outlets for our borrowers.
Dancing on multifamily, it's not just the agencies.
And we expect is Willy mentioned and I alluded to in my remarks as well. We expect you know an acceleration in the amount of brokered financing that we're doing this year certainly relative to last year, when the markets, where they're pretty soft because of the pandemic yep.
I would also on to see if see if I can just before we move off of that I just add one other thing our investments in databases started in the multifamily sector and that's what has driven those new client acquisitions and refinancings to our portfolio. We are very focused right now on expanding those databases into broader.
<unk> and as we develop those databases and use the same technology to find leads find new clients that will also accelerate our growth in the broader capital market space as it relates to lending on office retail hospitality and industrial and so I would just say that while Steve gave a great number as it relates to Q1 vs.
Q1 in the amount of non multi we did in queue wanted this year all of that focus on technology that started in multi is now moving into the broader commercial space and that will benefit us tremendously as capital comes back to those other asset classes yep that.
It'll be an important data point for us to track going for it because I agree that's important strategically for you to to add those other property types of final quick thing Uhm, obviously, it's.
It's political season, obviously, we're getting a lot of ideas thrown about tax law changes, whether they'd be corporate or even real estate. The implication of corporate tax change I need a higher rate is pretty obvious, but willy it seems that 10 31 exemption the tax free exchange.
But.
Yeah talking to your investment sales team, how big a deal is that in terms of driving activity and if it was to be modified or eliminated could that frees the market for for some period of time in terms of multifamily transactions Alright. That's my file. Thank you so Steve.
I'm Gonna say something that won't please many uhm commercial real estate investors and developers and in the process of that probably a lot of our clients, but they're not that many that I think this is going to.
Upset but the bottom line is the 10 31 exchange issue is not an issue whatsoever for Walker Dunlop.
There's a paper that was published by the <unk> by two professors at the University of Florida that looked at the total commercial real estate sales market between 2010 and 2020. It was published in September of 2020 and in that paper. They looked at every transaction across all asset classes.
And came back with seven per cent seven not 77 per cent of total commercial real estate sales transactions between 2010 and 2020 at 10 31 exchange so seven.
Inside of that the average sales price of that seven per cent was $500000. So the average sales price that our investment sales team had on the properties day sold in 2020 was $46 million $46 million. So first of all it's a small part of the <unk>.
<unk> and second of all it is transactions that Walker and Dunlop doesn't either broker nor finance now some of our competitor firms focus on those types of deals in that exact same study they cite Marcus millichap own research, saying that 23 per cent.
Of their investment sales volume in 2020, 2017, 18, and 1923 per cent was on 10 31 exchange transactions. So for a firm like Eminem. They got a lot of clients, who use 10 31 money to swap out of assets and not pay taxes for W. Indie it is not an issue as it relates to.
The capital gains rate certainly if you had to change in the capital gains rate that could accelerate transactions.
In 2021.
Depending on whether it is prospective a retroactive.
If they decide to do retroactive and bring it back to January 1st 2021, which many people talk about two things there one difficult to implement.
<unk>, both president Bush's tax change in 2001, as well as President Clinton's tax change in 1997, both were retroactive. Both we're past kind of June July timeframe, and we're retroactive to the beginning of the year.
Does everyone probably remembers the Trump tax cuts of 2016 or 17 were implemented in 2018. So they pass that legislation December and it started on January 1st 2018. So it was prospective many believe that the tax changes will be prospective not retroactive, but one other thing.
That we are looking at and it sort of goes back to the point, Steve made a moment ago as it relates to the breath and capabilities Walker and Dunlop is if it is a change the capital gains rate that is significant.
And it is retroactive.
Can we go raise capital that allows people to do <unk> transactions into some type of <unk> vehicle, where rather than having to deal fall away because the seller doesn't want to pay the increased capital gains tax. We can have some type of fun that can buy those assets and allow for the sellers to have shares in a free.
<unk>, where they they're hold them until the tax laws change again or they just don't take the bite of the higher capital gains tax today. So we're looking we're trying to figure things out but at the end of the day I would say to you that 10 31 as it relates to W. N D is not an issue and as it relates to a change in the capital gains rate. That's obviously a.
If you will a seller by cellar or a borrower by borrow a decision about whether they're gonna check transact or not and if it is if you will a huge change in the cap gains rate and it is retroactive we will work very hard to create vehicles that sellers can sell into and a tax efficient manner.
Very helpful comments, Thank you both.
Thanks day, Thank you Steve.
And you feel good.
Time, there are no further questions. So I'll turn it back over to really for curbing remark.
I just reiterate thank you everyone for joining us this morning, Uhm, great start to the ear per WMD, our growth is accelerating which is really exciting to see and thank you just stephen to Kelsey into our team for all they did to put this call. The other I hope everyone has a great day.