Wells Fargo Targets Commercial Real Estate

August 31, 2011

To generate more revenue, Wells Fargo is reportedly turning to commercial real estate loans. Wells Fargo & Co. is expanding its lending to the commercial real estate sector, at a time when many other banks are trimming it. The bank is also buying up commercial real estate loans from other banks.

Wells Fargo has become the leading holder of commercial mortgages among banks, boasting $3.3 billion in loan holdings during the second quarter, according to Trepp LLC. 

"We like the risk-return of the business," David Hoyt, who heads wholesale banking for Wells Fargo, told The Wall Street Journal.

Last week, Wells Fargo reportedly agreed to buy $3.3 billion in loans for commercial properties from Anglo Irish Bank Corp., The Wall Street Journal reports. Earlier this month, Wells Fargo purchased about $1.4 billion in U.S. loan holdings from Bank of Ireland. 

J.P. Morgan Chase also seems to be trying to cash in on commercial real estate. It’s been steadily increasing its commercial property lending too. Last summer, the bank purchased a $3.5 billion portfolio of mostly multifamily performing loans from Citigroup Inc. 

Source: “Wells Fargo Jumps on Commercial Deals,” The Wall Street Journal (Aug. 31, 2011)

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