Good morning, everyone. I'm Kelsey Duffey, Senior Vice President of Investor Relations at Walker & Dunlop. I would like to welcome you to Walker & Dunlop's first quarter 2022 earnings conference call and webcast. Hosting the call today is Willy Walker & Dunlop Chairman, CEO. He is joined by Steve Theobald, Chief Financial Officer. Today's webcast is being recorded and a replay will be available via webcast on the investor relations section of our website. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you have dialed into the call and would like to ask a question at that time, please press nine on your phone. If you are accessing the webcast on your computer, please click the Raise Hand icon on the bottom menu bar of the webcast screen.
This morning, we posted our earnings release and presentation to the investor relations section of our website, www.walkerdunlop.com. These slides serve as a reference point for some of what Willy and Steve will touch on during the call. Please also note that we will reference the non-GAAP financial metrics, adjusted EBITDA, and adjusted diluted earnings per share during the course of this call. Please refer to the appendix of the earnings presentation for a reconciliation of these non-GAAP financial metrics. Investors are urged to carefully read the forward-looking statements language in our earnings release. Statements made on this call which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe our current expectations and actual results may differ materially.
Walker & Dunlop is under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, and we expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our annual and quarterly reports filed with the SEC. I will now turn the call over to Willy.
Thank you, Kelsey, and good morning, everyone. We had a strong start to 2022 with our people, brand, and technology continuing to differentiate Walker & Dunlop in the marketplace and contributing to strong growth across the enterprise. We saw growth in almost every business line and key financial metric due to the investments we have made and the performance of our fantastic team. The market's rapid transition to pervasive inflation and higher rates has required our bankers and brokers to think proactively and innovate for our clients, which they did in spectacular form throughout Q1. In times of market volatility, Walker & Dunlop has a long-standing track record from the depths of the great financial crisis to the lockdown of the pandemic of executing on behalf of our clients and growing dramatically. We held our first all-company meeting in over two years in Denver at the end of March.
Over 1,000 Walker & Dunlop employees gathered to hear speakers, participate in trainings, and celebrate our collective success. I told the team in my closing remarks that we have created something very special at Walker & Dunlop. I equated it to catching lightning in a bottle, and I have no doubt that everyone left Denver feeling like they are part of an amazing team. Beyond highlighting the people and technology of Walker & Dunlop at our Denver meeting, we also previewed our new brand campaign titled Community Starts Here. For as long as I've been CEO of Walker & Dunlop, we have talked about the what of Walker & Dunlop, what we do, how we do it, and what it can do for our clients, investors, and employees. We haven't focused on the why. Why we do what we do, and why does it make a difference.
In launching Community Starts Here, we are underscoring that the capital and services Walker & Dunlop provides allows for communities where people work, shop, live, and play to be created and cultivated across the country. Answering the why do we do what we do and why does it make a difference, is vital in the post-pandemic hybrid workplace, where human capital retention and performance is exceedingly important. The breadth and diversity of our platform is more evident in Q1 2022 than ever before due to the dramatic investments in companies and human capital we made over the past year. We helped our clients navigate challenging market dynamics from war, inflation, and rates, and grew total transaction volume 40% to $12.7 billion.
Total revenues grew a comparable 42% year-over-year to $319 million, and drove diluted earnings per share of $2.12, up 18% from the first quarter of last year. This top and bottom line growth, which was clearly aided by our Q1 acquisition of GeoPhy, is exceptional when considering the competitive landscape, macroeconomic environment, and investments in human capital and technology we have made over the past year. 40% growth in total transaction volume was once again led by strong growth in debt brokerage and property sales volumes, which were up 31% and 153% respectively from Q1 2021.
Our lending with Fannie Mae grew 30% over Q1 2021, and our overall GSE market share grew to 12.3% due to the strength of our Fannie volumes, up from 11.4% in Q1 of 2021. Fannie and Freddie only lent $31 billion to the multifamily market in Q1, leaving them with $125 billion or 80% of their total 2022 lending capacity, which has remained a reliable, consistent capital source for multifamily borrowers to use over the remainder of the year. Technology will continue to underpin Walker & Dunlop's growth.
During the quarter, 61% of our refinancing volume was on new loans to our servicing portfolio, and 19% of our total transaction volume was with new clients to Walker & Dunlop. Two data points that reflect our use of technology, which in combination with our talented people and expanded brand, are driving continued growth in volumes. In February, we closed the acquisition of GeoPhy, our prized joint venture partner and a wonderful commercial real estate technology company. As we outlined in the GeoPhy press release, there is a very significant earn-out component to the acquisition that will keep the GeoPhy team focused on growing our two most technologically enabled businesses, small balance lending and appraisals.
These two businesses grew dramatically during the first quarter, with small balance originations of $176 million, up 54% from Q1 2021, and the completion of 711 appraisals, up 187% over Q1 of last year. While these two businesses are only beginning to impact our financial results, they have huge markets to penetrate and have taught us a ton about how to combine technology and human capital to enter new markets successfully. One of the most important facets of Community Starts Here is Walker & Dunlop's commitment to developing and financing affordable housing. The acquisition of Alliant Capital brought with it investments in over 100,000 affordable apartment units, as well as the ability for Walker & Dunlop to provide both debt and equity financing on affordable properties to our clients.
We spent Q1 integrating Alliant Capital's team and products into W&D in our quest to build the very best affordable housing platform in the country. We should begin to see the synergies between the two companies emerge as we move throughout 2022. Zelman, which we acquired in 2021, continues to be viewed as one of the very best housing research firms in the country. Zelman's market knowledge and customer relationships have contributed nicely to sales growth in our banking and brokerage businesses. We remain focused on expanding Zelman's investment banking capabilities from the single-family housing market into commercial real estate. The addition of $14 billion in assets under management with the acquisition of Alliant Capital did not diminish our growth expectations with Walker & Dunlop Investment Partners, where we raise commingled funds to place capital into the transactions our bankers and brokers work on every day.
As investors have seen us do before, we will be very active in the market when risk-adjusted terms are attractive. Think for a moment what we've been able to accomplish over the past three years to generate the financial results of Q1 2022. We invested heavily in property and debt brokerage in 2019 to expand our service offering. We then used our leadership position with Fannie, Freddie, and HUD to wildly outperform during the pandemic lockdown of 2020. When the market returned in 2021, we brought our expanded service offering to grow transaction volume 66%. Rather than simply meet the demands of the recovery market, we made three major acquisitions in investment research, affordable housing, and technology.
To grow revenues 42% in Q1 2022 in the current market environment and generate 18% EPS growth while assuming dramatic increases in overhead and personnel expenses due to the three acquisitions is truly fantastic. I will now turn the call over to Steve to discuss our Q1 financial results in greater detail, and then I'll come back to discuss what we see ahead. Steve?
Thank you, Willy, and good morning, everyone. As Willy just described, we started 2022 with a solid first quarter in which we were able to leverage the breadth of our platform to meet our clients' needs within uncertain market conditions while generating strong financial results and creating momentum for future growth. First quarter diluted EPS was up 18% year-over-year to $2.12, while the strength of the cash-generating components of revenues continued to drive growth in adjusted EBITDA, which was up 3% to $63 million. Growth in adjusted EBITDA was offset by the year-over-year increase in expenses related to the three significant acquisitions we made during the last 12 months.
We are currently working to integrate these acquisitions and are extremely excited about the benefits and synergies we will begin to see in our financial results once these companies are fully integrated and gain scale. Revenue contribution in the first quarter from these acquisitions was $24.7 million, and we expect this number to grow over the course of the year, due in part to the seasonal nature of Alliant revenue, but also as we achieve our planned synergies. Adjusted earnings per share for the quarter was $1.09 in Q1 of 2022, compared to $1.35 in the prior- year quarter. Through the acquisition of GeoPhy, we revalued our previous 50% interest in Apprise, our appraisal joint venture, based on the $117 million value of the business.
This resulted in the recognition of $40 million of revenue in the quarter, which flows through to net income and earnings per share but is excluded from our adjusted EBITDA and adjusted earnings per share due to its non-cash nature. Q1 personnel expense as a percentage of revenues was 45%, up from 43% in the first quarter of 2021. Personnel expenses have naturally increased as we originate more transaction volume and as we welcome the Zelman, Alliant, and GeoPhy teams onto the platform. These acquisitions added $12.4 million of additional personnel expense in the first quarter. Q1 growth in personnel expense was also driven by the increased commissions expense resulting from the strong growth in transactions volume.
As you may recall, at the end of 2021, we doubled the size of our senior secured term loan to $600 million and assumed Alliant's fixed rate securitized debt facility in the amount of $155 million. The increase in outstanding debt resulted in a $4.6 million year-over-year increase in interest expense in Q1 of 2022. While the term loan is tied to SOFR, it has a fifty basis point floor. We locked in our rate for the first six months of this year, so we will not see any impact from rising interest rates on our interest expense until the second half of the year. At which time we should see offsetting increases in the interest income from our escrow deposits, which are at $2.5 billion and expected to grow over the rest of this year.
Q1 operating margin was 28% within our annual target range of 26%-29%, and return on equity for the quarter was 19% within our annual target range of 19%-22%. We ended Q1 with $141 million of cash on our balance sheet after closing the acquisition of GeoPhy and paying company bonuses during the quarter. Our strong financial position has allowed us to close a number of strategic acquisitions over the past year that are in line with our Drive to 2025 objectives, including the largest acquisition in our history at the end of 2021. We continue to increase our cash flow generation to support our growth initiatives as well as our ongoing dividend payments and any opportunistic stock repurchases.
To that end, yesterday, our board of directors approved a quarterly dividend of $0.60 per share, payable to shareholders of record as of May 19, 2022, consistent with last quarter's dividend. With our recent acquisitions, we are updating the presentation of our financial disclosures to reflect a new operating segment presentation, which is included in our earnings release and 10-Q filing. Agency lending, debt brokerage, property sales, and valuation services are now included in the capital market segment. Our more recurring revenue streams, including servicing, low-income housing development and tax credit syndication, asset management, proprietary capital, and investment research, are now included in the servicing and asset management segment. Infrastructure, treasury, excuse me, and other corporate services are included in the corporate segment.
This new financial reporting structure reflects the impacts of the Zelman, Alliant, and GeoPhy acquisitions, and we believe will provide the investment community with even more transparency into our overall financial performance going forward. For the first quarter, the capital markets segment generated total revenues of $164 million, up 12% from Q1 2021, and net income of $47 million, down 17% year-over-year from $56 million. The decline in net income was primarily due to the increase in personnel expense, including a $16 million increase in commissions as we continue to hire new origination teams, grow our small balance lending team, and grow origination volumes. The investments we have made in our people, brand, and technology are continuing to benefit our total transaction volume, with Q1 total transaction volume up 40% year-over-year to $12.7 billion.
This growth was primarily led by property sales volumes up 153%, debt brokerage volumes up 31%, and agency volumes, which were up a combined 7% year-over-year due to strong Fannie Mae volumes. We already have a large GSE pipeline for Q2 and fully expect both GSEs to hit their volume caps by the end of the year, which in combination with our expectations for continued growth in debt brokerage and property sales volumes should benefit our capital markets and overall company financial performance for the remainder of the year. Q1 adjusted EBITDA for this segment was $11 million, down from $17 million in the first quarter of last year, due primarily to the increase in personnel expense that I just mentioned.
The servicing and asset management segment generated total revenue of $111 million during the quarter, up 42% from the first quarter of 2021, and earned net income of $33 million compared to $27 million in Q1 of last year, a 19% increase. The strong increase in revenue and net income was due to the addition of Zelman in July of 2021 and Alliant in December of 2021. We ended the quarter with a $116 billion servicing portfolio, up from $110 billion at March 31st, 2021, with a weighted average servicing fee of 25 basis points and $17 billion of total assets under management, which includes Alliant, WDIP, and our Blackstone joint venture.
During the quarter, our calculated ten-year historical loss rate declined from 1.8 basis points- 1.2 basis points, resulting in provision benefit of $9.5 million compared to a provision benefit of $11.3 million in the prior- year. From an overall perspective, the credit metrics in our portfolio continued to look really good. This segment should consistently generate extremely strong adjusted EBITDA due to its cash-oriented recurring nature, and in Q1, it contributed $88 million of EBITDA compared to $69 million, up 26% from the first quarter of last year. Finally, the corporate segment generated $44 million of revenue, primarily from the $40 million appraised revaluation adjustment. Since the majority of our corporate overhead is allocated to this business segment, net income and adjusted EBITDA will typically be negative.
For the first quarter, net income for this segment was - $8 million compared to - $26 million in the prior- year, as overall headcount in this segment increased due to the growth of the company. Adjusted EBITDA, which excludes the impact of the Apprise valuation adjustment, was - $36 million compared to - $26 million in the same period last year. We plan to hold an investor day on May 19th, during which we will provide more detail on our segment financials. We hope all of you can join us to take a deeper dive into our new reporting structure and hear more about the new business initiatives that are part of the Drive to 2025. Walker & Dunlop has a long-standing reputation for putting our clients' needs first.
During a period of market uncertainty, our clients have benefited from our ability to meet their needs with the capabilities of our broad and diversified platform, allowing us to grow our transaction volumes and market share. As we move into the second quarter, market conditions remain uncertain and our clients' needs for the best advice and service will be even more vital. We have a strong pipeline of business for Q2. While none of us can predict the future, we have built a diversified and resilient business model and expect to achieve our goals of double-digit earnings and EBITDA growth for the full- year. Thank you for your time this morning. I'll now turn the call back over to Willy.
Thank you, Steve. Before I dive into our outlook, I'd like to briefly outline two major management changes at Walker & Dunlop that will take effect on June first. As many investors know, Steve Theobald has been an exceptional Chief Financial Officer. When Steve joined Walker & Dunlop in 2013, we were a much smaller company in need of the management skills and leadership that Steve possesses in spades. Due to Walker & Dunlop's dramatic growth, I have asked Steve to become Chief Operating Officer. In his new role, Steve will drive integration of all our product lines and businesses and also identify and realize cost savings and efficiencies throughout the company. This is an exciting move for Steve, and I'm extremely pleased to have someone with Steve's knowledge and leadership in this new role.
While stepping into Steve's role and track record as CFO of Walker & Dunlop is no small feat, I am confident that Greg Florkowski is ideally suited and prepared to do just that. Greg joined Walker & Dunlop from KPMG in 2010, and after serving as Steve's number two on our accounting and finance team, Greg has done a simply masterful job running business development for the past three years, including the successful acquisitions of AKS, TapCap, Zelman, Alliant, and GeoPhy. With Steve and Greg in their new roles, I am confident we now have the operational and financial management in place to drive Walker & Dunlop to our 2025 goal and beyond. The underlying objective of the Drive to 2025 is to grow annual revenues to $2 billion by 2025.
With revenue growth of 16% in 2021 and 42% in the first quarter of 2022, we are well ahead of pace on achieving that ambitious goal. Another goal in the Drive to 20 25 is to generate $13-$15 of earnings per share. As investors saw in 2021, as we replaced non-cash mortgage servicing rights with cash revenues and earnings from brokerage fees, EPS grew 6% while EBITDA exploded, growing 43% on the year. In Q1 2022, as Steve just highlighted, two one-time charges positively impacted GAAP EPS, so our earnings growth outstripped our EBITDA growth. It is our expectation that as we continue to ramp cash-generating services and they become a larger and larger percentage of our revenues and earnings, that EBITDA growth will continue to outpace earnings growth.
With that said, as our emerging technology-enabled businesses scale and become more significant contributors to our earnings, we have the potential to grow both revenues and earnings at rates we have not seen before. Despite inflation, rising rates, and war in Europe, the commercial real estate industry maintains many of the same strong fundamentals as it did at the end of 2021. Inflation rate hikes and underlying demand have created a single-family housing market where only 54% of new and used housing stock in America is affordable to someone making the median household income. That is down from an all-time high of 79% in 2012, and notably down from the historic average of 62%.
As home prices continue their upward trajectory with 20% year-over-year growth in the most recent Case-Shiller report and interest rates tick up over the next several months, the ability for an average American to go from renting to owning will become even more expensive. With limited new supply of multifamily properties due to the pandemic slowdown, a supply-demand imbalance exists today that should generate solid rent growth over the next few years. While rent growth and rates are very important, it is the amount of capital in the global financial system that is driving commercial real estate. Both debt and equity capital continue to pour into commercial real estate. Banks are wildly overcapitalized and seeking assets to lend on. Same with life insurance companies.
The one area of weakness in the debt capital markets is CMBS and securitized lending, where market volatility makes it very hard to originate collateral for securitization. The exception to that statement is Fannie Mae and Freddie Mac, where the GSE scale and pricing advantage allows them to be consistent sources of capital even in times of market uncertainty, as we saw throughout the pandemic. On the equity side, Preqin estimates that U.S. funds had $288 billion of dry powder waiting to be deployed into commercial real estate at the beginning of 2022. The two largest private REITs, Blackstone's BREIT and Starwood's SREIT, raised $7.8 billion and $2 billion respectively in Q1. Over the long term, it is capital flows and not interest rates that will determine commercial real estate cap rates.
The market may take time to digest interest rate moves over the course of the year, but it is our responsibility to guide our clients as they seek to deploy capital during these transitions. With so much capital chasing assets in an inflationary economy, we believe commercial real estate and the transaction volumes that drive Walker & Dunlop's financial results will remain healthy over the coming years. The demand for multifamily assets has not abated, albeit we are finally seeing pricing disparity between various asset classes and the quality of the asset, something that had disappeared from the market in 2021. Our Q2 pipeline is robust across our debt and sales platforms, currently sitting with a 35% increase in projected Q2 transaction volume over Q1.
While it is difficult to project what the back half of 2022 looks like at this point, that's no different from any previous year, particularly in 2020, in the depth of the pandemic when we had zero visibility to where the markets were headed. Yet as we did in 2020, the W&D team will remain close to our clients. We'll continue to innovate, and we'll continue to grow our market share as larger companies with broader exposure to international markets, business lines, and credit risk pull back. We have several advantages over our larger competitors. We are U.S.-centric at a time when the world is decoupling. 80% of our transaction volume is in the multifamily industry, the top-performing commercial real estate asset class and a terrific inflation hedge due to the ability to move rents annually.
We have a focused business model and exceptional management team. Howard Smith and I ran this company when Fannie Mae and Freddie Mac went into conservatorship in 2008, and the great financial crisis took down large swaths of our economy. Yet Walker & Dunlop grew dramatically throughout the GFC, culminating with our IPO in December of 2010. Steve Theobald and I spoke the day the U.S. government granted forbearance on any government-insured mortgage by Fannie, Freddie, and HUD at the advent of the pandemic in 2020. A month later, we had a warehouse line in place to handle any pass-through payments to bond holders.
We successfully originated the largest loan in Walker & Dunlop's history, and we grew to become the largest provider of capital to the multifamily industry in 2020, while many of our larger competitors were hobbled by the economic fallout of the pandemic. W&D is by no means immune to economic cycles and volatility, but we are exceptionally well-positioned to continue gaining market share due to our focus, strategy, and team. I want to finish by returning to the all-company meeting we held in Denver at the end of March. We've long felt that if we created a great place to work, that the financial results would follow, and follow they have. Yet throughout the amazing growth and financial performance of Walker & Dunlop, we never had the brand and scale to truly leverage off of our culture.
Yes, clients would know that they were working with an exceptional team, and team members would know that they were at an exceptional company. Only having a few hundred employees with a relatively small brand didn't allow for the word to get out. With W&D's growth, the dramatic success we've had in building our debt brokerage and investment sales businesses, the Walker Webcast, and having nearly 1,400 employees, many of whom have joined W&D from competitor firms, the word is out. The word is that Walker & Dunlop's people brand and technology are the very best in the industry, and combined with our corporate culture, make W&D a truly great company. It is an honor to lead this community of talented professionals each and every day, and I'm deeply grateful for all the hard work and success of the W&D team.
Thank you for joining us this morning. I will now turn the call over to Kelsey to open the line for any questions.
The floor is now open for questions. At this time, if you have a question on the phone, please press star nine, or if you are on your computer, please click the raise hand icon at the bottom of your webcast screen. Thank you. Our first question is coming from Jade Rahmani of KBW. Jade?
Thank you very much. Can you hear me?
We can.
Oh, thanks very much. Was wondering if you could talk about the outlook for transaction volumes. What are you hearing from investors? Clearly, rent growth has been extremely strong in the multifamily space, in particular with new lease rents up above 20%, especially strong in many markets. In addition, construction costs remain an overhang as inflation is extremely high, so replacement costs are rising. Yet, multifamily has been probably the darling of the commercial real estate asset class over the last decade, and many sectors exhibit record low cap rates. Could you please just triangulate those variables and talk to the tone of investors that you're seeing?
Yeah, Jade. Thanks for joining us this morning. I had a Walker Webcast yesterday with Ivy Zelman, Aaron Appel, and Chris Mickelson, where we went into quite some detail on sort of, if you will, multiple aspects of that question, Jade. I think what I would summarize from that discussion is that there's clearly concern about the single-family housing market with prices being as high as they are, and some price adjustment being needed in the single-family market. That gap between the affordability of rental versus the affordability of single family, as we said previously, keeps a lot of people in rental housing, and as you accurately described, rent growth is unprecedented right now.
The dynamics of lagging supply, and we're seeing very little new supply because of the slowdown during the pandemic, and you rightfully underscore the fact that with cost inflation across the board as far as building materials, and then also the difficulty in getting labor to help build new supply, that there is a supply-demand imbalance which should allow for rents in multifamily properties to continue to grow above trend. As Steve said in his comments, Jade, from a credit standpoint, we feel extremely good about the market. From an overall volume standpoint, I mentioned in my part of the script that our Q2 pipeline right now is 35% above what we did in Q1.
We are seeing a significant amount of activity, both on the debt financing side as well as on the investment sales side, and feel very, very good about our market positioning.
Thanks for all of that. Great points. Regarding the overall company's earnings picture, this quarter personnel expense grew, I believe, around 50% year-over-year. Notable growth in the platform. You mentioned all of the acquisitions, you mentioned the increased capabilities in affordable housing. Were there any one-time expense items to note? Perhaps they weren't charges, but any earn-outs, any unusual payments? Or should we think about the personnel expense relative to commission-based revenue ratio to be consistent with what we saw in the first quarter? Just wondering if there's any unusual items in that $140 million personnel expense number.
Yeah. Hey, Jay. Jay, this is Steve. Thanks for the question. I'll try to unpack that a little bit. A couple thoughts. One, historically, Q1, as you know, is you know, lighter from a transaction volume perspective. Typically on the commission side, we still have a lot of our origination team working through their splits, and they're not really at the high end of their commission rates until second or third quarter in some cases. That's particularly true in the investment sales side. Given the strength of the volumes in Q1, we had, I'd say a much higher percentage of our origination team get to their max splits early in the year.
I think that's really a function of just the overall volume that we're now generating on a quarter-to-quarter basis. You're seeing a higher commission rate in Q1 than we would have seen historically. That's part of it. Two, the you know, company bonus accrual. You know, just given the $2.12 of earnings, you know, we typically accrue based on the underlying performance of the company relative to budget. Because of the results, the accrual's a little higher than it would've been otherwise. I think just looking at, beyond personnel expense, there were, you know, some one-time other expenses in there associated with the transactions between, you know, carryover from the Alliant transaction as well as the GFI transaction in Q1.
We had higher professional fee expenses than we otherwise would've expected going forward.
Thank you for taking the questions.
You bet.
Thank you, Jay. Our next question comes from Steve DeLaney of JMP.
Good morning, everyone. Can you hear me?
We can.
Okay, excellent. Well, first, congratulations to Steve and Greg on their promotions. Look forward to working with both of you in your new roles. Also the good news about May 19. I like the way you've laid out the three segments, but we obviously need to go to school on that a little more. Thank you for that opportunity. Willy, if we can, you know, every conversation financial conversation starts with interest rates these days. You've got the 10-year up 150 year- to- date, resi mortgage is up 200. Can you just talk a little bit about where Fannie and Freddie are pricing, you know, their permanent loans today? Maybe compare that to year-end. Let's leave it there for now, and then I'll come back with a follow-up on that, if you could.
Just kind of give us a sense of that, the cost of credit at the agencies today? Thank you.
Sure, Steve. Nice to have you with us this morning. I would say this, we were, I guess, pleased with our Q1 volumes. But I will also say that that was a lot of work to generate those volumes in Q1. As you can see from the numbers I put forth, Fannie and Freddie only used 20% of their annual allocation in the first quarter.
Yes.
They've got a tremendous amount of capital going into the rest of the year. The other thing to keep in mind as it relates to the rest of the year, Steve, is that there is new AMI data that's coming out soon that will be used to calculate affordability. Because of the step up in average median income across the country, a lot of Fannie and Freddie lending for the rest of the year will be scored distinctly from how it's been scored up until now. I believe that's imminent. I do believe that their need to focus on affordability versus market rate will change somewhat as we move into Q2, Q3, Q4.
The final thing I would just say is as much as both of them at times have felt like they're completely out of the market, and we've been quite frustrated about that, as they always do, they come back in and win business and get to the volumes that they need to get to. I would reiterate that we fully expect both Fannie and Freddie to use every dollar of capital that they are allowed to use in the multifamily space for 2022. I would also say Freddie Mac appointing a new head of multifamily just day before yesterday is a huge move. Because since Deborah Jenkins left Freddie Mac, that platform has not had the leadership it has needed.
We're very, very pleased to see not only a new leader of multifamily, but for someone who comes from within Freddie Mac taking that role. The final thing I would say, Steve, is, as I said previously, while the CMBS markets have banged around and it's been very, very difficult, 2021, the theme of 2021 was debt funds and securitized debt. Markets were. They had limited volatility, rates were low, and that securitized world was a big competitor to the agencies. 2022 is totally different, as you well know. VIX is up, the forward curve is ridiculously steep, and it's very, very difficult to price securitized debt unless you are Fannie Mae or Freddie Mac. Fannie and Freddie, as they always do, will remain a consistent source of capital throughout market cycles and throughout volatility.
We feel quite good about the role that Fannie and Freddie will play in the coming quarters given that market dynamic.
You're heavily transaction based, and you've built your amazing brokerage business and investment sales, you know, to accommodate that. You mentioned the $288 billion of private equity, but every transaction is gonna require that an owner of a property get a price that reflects a cap rate he wants as opposed to what the investor wants. There obviously has to be a negotiation there. Do you think that as interest rates drive cap rates necessarily higher, that there will be a slowdown in property sales, specifically multifamily property sales? If that scenario develops, could Walker & Dunlop step in with a new kind of expanded bridge product?
I guess I'm thinking about something that I think we'd call like a mini perm loan, that allows that property owner just to extend his hold period. Thank you.
The first thing I would say is that there are both male and female property owners who will be selling properties, so it would be.
Thank you. Apologize. Yes.
Not at all. Not at all.
Please go ahead.
Just wanted to point that out. The second thing that I would say on that, Steve, is this, as you've seen our investment sales team grow from $6.4 billion of transaction volume in 2020 to $19.4 billion in 2021. We have built, I believe, the very best team in the country. We have done it by going and finding the very, very best brokers in every market, and Chris Mickelson has done a fantastic job of leading that effort. If we see a slowdown in investment sales, I do not think it impacts Walker & Dunlop to the degree that it will impact some of our larger competitors.
We have a more focused team, we have a much smaller team, and we have a much larger market presence for the size of our team. That would be point one as it relates to any slowdown we see. The second thing I would say is, in your comment, I think you're saying that owners of properties aren't gonna be able to get the type of return for selling their property that they would like to get.
Yeah.
I would only say to you that owners of multifamily properties have had an incredible run and have realized amazing appreciation in their properties. As a result, if they are sellers today, they will get a price that is a very, very good price. That then leads into cap rates, and quite honestly right now, Steve, we are watching and seeing that there is so much capital in the system that right now there are cash buyers who are buying at extremely low cap rates because they're, A, not reliant upon the debt markets, and B, they have a lot of capital to deploy. Back to that $288 billion number that I said on private equity firms or the $7.8 billion that the Blackstone BREIT raised in Q1, there is a massive amount of equity capital out there.
What we are clearly seeing is that when people are acquiring properties, they're not going to high leverage levels because the cost of debt has gone up so significantly. Quite honestly, that's not a bad thing given the amount of equity capital out there. We're doing plenty of deals that are 40%-50% LTV on the acquisition. The final piece as it relates to new products and services to meet the market, I know for a fact you've watched us for a long enough period of time, Steve. If there is an opportunity for us to create a product that meets a market demand, we will do it.
Great. Thank you for the color. It's very helpful.
Thank you, Steve.
Thank you, Steve. Our next question comes from Henry Coffey of Wedbush Securities. Henry?
Henry, we can't hear you yet.
Henry, you might need to unmute yourself now.
There you go.
Hey, this is Jay McCandless on for Henry. Thank you for taking my questions.
Yes.
First question I have, if you know, I know you guys had a very good discussion on the webcast yesterday about single family, but if you look at multifamily starts, we're at the highest level we've seen since the eighties. On one hand, I think that could be good for your transaction volumes, but then on the other hand, what does that do to rental rates and rental growth? Would love to get your take on the amount of supply that's gonna be coming to market, and hopefully you guys will be brokering loans on all of it. It's a lot of product for the market to absorb.
Yeah. I think that number right now is about what? 520,000 units that are under development right now, which is up from a historic run rate of about 375-400. While elevated, I think the other point to that is it's not delivering tomorrow. You know, we're very focused on 2022, on moving through this year and seeing rent growth offset this transition as it relates to interest rates. When that new supply arrives in 2023 and 2024, it's gonna be a dramatically, hopefully different economic landscape. We will, hopefully, gotten through this rate-raising period.
As I think, you know, we saw yesterday with the rally in the markets when Chairman Powell came out and said, "We're doing 50 basis points today, and we're taking 75 basis points at the next meeting off the table." One of the things that, at least in my career, the thing that I don't like is when we get completely surprised by something. The Great Financial Crisis was a big surprise to everybody. The pandemic was a big surprise to everybody. As I highlighted in my comments, Walker & Dunlop managed through those two crises exceedingly well, exceedingly well. The issue with it is that the market knows what's happening here. The Fed is being as transparent as it possibly can be.
As a result of that, while this transition period is painful in the sense that people are sitting there saying, Oh, yesterday, my cost of debt was gonna be 4.25, and today it's 4.75. To go do a fixed rate loan, looping back to Steve's question as it relates to where is pricing on a 10-year fixed rate loan today. It's about 4.75 with the agencies, obviously, depending on sponsor, depending on leverage level, et cetera, et cetera. We've got to work with our clients through this transition period. That new supply that is there right now, I think there are two things. One, it'll be delivered in 2023 and 2024. Then the second thing to it is getting it delivered, given where costs are right now and given where labor supply is right now, is gonna be somewhat challenging.
It is not gonna be a normal delivery cycle to get those units delivered.
Thank you for that answer. Steve, congrats from all of us on your promotion. Wanted to pick at the one-time nature of some of these expenses this quarter. Just thinking about what a run rate SG&A, understanding that you've got a variable brokerage component in there, but just how much of, I guess, a core SG&A should we expect going forward with the addition of the new businesses?
Yeah. First of all, thank you. I appreciate it. I'm super excited about the opportunity here. In terms of your question, look, I think the one-time expenses, I would say, are, you know, kinda in the $5-$10 million range for Q1, if that's helpful.
Absolutely. Thank you. My next question. We've recently seen Fannie Mae expand their underwriting box on affordable assets, including manufactured housing and realizing that they are going to start allowing homes to be part of the underwriting transaction in addition to the land. Have you guys been seeing similar moves in other housing types by the GSEs? And if so, you know, what could be the positive or negative effects for WD going forward?
Not a lot on the new product development, if you will, or moving beyond their mission. They're still very focused on affordable, and it's one of the reasons why the Alliant deal is, in our view, an exceedingly valuable deal, not only from a financial standpoint, but from a strategic standpoint. I think it was Fannie who lowered rates yesterday on their small balance lending business by 10 basis points. Our entry into that space and the team we put together and the focus on technology and the GeoPhy acquisition make us feel extremely good about that. Remember, that's half the multifamily market is small balance lending, half of it, and it's dominated by the banks. With our team, with our brand, and with our technology focus, we have a lot of runway there.
As I sit around and think about W&D versus the big competitors, and I think about what happens in any type of volatile markets, typically to the banks, while they are wildly overcapitalized right now, and I did underscore in my comments that banks are chasing assets to lend on right now, chasing them everywhere. They're gonna continue to be a fierce competitor. I would say that our focus on that market and the opportunity to grow in that market is exceptional. Absolutely exceptional. I would just back to the agencies. I wouldn't expect the agencies to sort of go into any new products right now.
I think that this change in AMI levels will have a big impact on how competitive they are on market rate, which will, I think, allow them to be less concerned, if you will, about affordability on every loan they're doing, as the AMI numbers roll through. We'll see once the AMI numbers come out, and it obviously is gonna also be focused in a lot of the markets where we've seen huge growth. One of the things that happens in those types of markets, like in Nashville or in Austin, is that you've got great rent growth, your AMI has gone up, but cap rates are staying begrudgingly low, and so it's hard to get to leverage levels that borrowers like. That's looping back a little bit to Henry's question.
What we're seeing is cash buyers and low leverage buyers dominating the market right now because of the amount of capital sitting on the sidelines.
Last one is a two-parter from me. The 40% gain in transaction volumes were very impressive this quarter, as was the 153% gain in property sales volumes. Could you break out maybe how much of that was organic versus purchased? Then also just kind of, I think I know the answer to this one, but assuming that we're moving into a higher rate environment on a more permanent basis, historically, has that driven an increase in property sales as set themselves and/or look to, I guess, maybe hedge some of their stock market exposure through hard assets?
On question one, that's all organic because Alliant and GeoPhy didn't add to transaction volumes in Q1. All of that. There's a team here and there that was added in 2021 that is part of that Q1 total transaction volume growth. But that's from, I believe your question, that's all organic growth. None of that comes from the acquisitions that we've done. And then on the second question as it relates to rising interest rates, investment sales volume, financing volume.
I think one of the things that investors have seen at W&D is that because we have this scale brokerage business that's using market rate capital and is selling market rate buildings as well as specialty products in seniors and students and a bunch of other specialty products, when markets are moving like they did in 2021, we grow, and we play really well. When markets dislocate, we also, because of our size and scale with the agencies, have this countercyclical portion to our business that has other large firms that don't have that get, if you will, washed out as it relates to revenue and volume growth. We have the ability to sit in that space and continue to put up very, very solid numbers.
I just go back to what I said previously, which is that it's very difficult to project exactly what's gonna happen from a volume standpoint as we move through this year. I think cap rates stay for investors, begrudgingly low for sellers, happily low as it relates to the amount of capital trying to be deployed into the market. I would just say that, you know, rate movements and rate volatility is very difficult for, you know, the last week of April and about halfway through last week. Quite honestly, over the last week, we've seen things settle down. We've been able to price really well. I think it's very important to understand that this market gets its volatility, then it gets to levels, and then people start to transact again.
What I don't think we're gonna see is as rates rise, I do not think we will see a precipitous move up in cap rates just because of the amount of capital looking to invest in this market.
Great. Thanks for taking my questions.
Thank you, Jay. We have no other questions at this time, so I'll turn it back over to Willy for closing remarks.
Great. I would thank everyone for joining us today. Thank you to those who had questions for us. Congratulations to Steve and Greg on their new roles at W&D. It will be a different two of us next quarter when Greg is in Steve's seat and Steve is in his role as COO. But Steve, thank you for all of 9.5 years of doing earnings calls with me. It's been a huge pleasure, and I'm super excited to continue working with you in your new role. I wish everyone a fantastic day.
Right back at you, Willy.
Thanks, everyone.