Finally...looks like Wells Fargo is one of the main players on the green lending train. Yesterday it was announced that Wells Fargo has loaned over $1 billion to finance new green projects...from apartment buildings and condos to mixed-use developments and schools. According to greenerbuildings.com, Wells has financed 19 LEED buildings in 10 states...with loan packages ranging from $10 million to $225 million.
"We can help protect the environment by supporting the development of energy efficient buildings." --Larry Chapman, Head of Commercial Real Estate at Wells Fargo
Here is the deal. $1 billion sounds like a lot to you and me...and it is. But it is almost all upside for Wells Fargo and here's why. If you look at their most recent 10K (annual financial filing to the public), at the end of 2006, they had made loans to residential and commercial customers totaling over $319 billion. To put this in perspective, the $1 billion in green loans represents about .003% of their total loan portfolio.
Wells Fargo is licking their chops right now. They are "building" a portfolio of green buildings, which are hot right now and will only continue to grow and expand. Green buildings are better for the environment, better than your typical built to code structure, have lower operating costs, have lower vacancy rates + there is a huge demand for green buildings right now. Customers can even qualify for large loans because of the overall lower cost to operate the building once it is complete...lower costs to operate-->more money in builder's pocket-->more money to make loan payments-->larger loan!