Commercial Real Estate Loans Business at a Glance
The commercial real estate loan collection of Wells Fargo includes real estate advance loans and real estate construction loans. Wells Fargo earns revenues on CRE loans in the form of notice on exceptional loans balances as well as charge and fees on loan originations and late payments.
Wells Fargo's commercial real estate (CRE) portfolio is highly diversified into a range of product categories. By means of product type, the largest segments of the range are office buildings and industrial/warehouse, which correspond to 23% and 11% of the portfolio respectively.
Average Outstanding Balance on CRE Loans
Average exceptional balance on CRE loans jumped by 34% to $137 billion in 2009, in the face of a decline in insist for CRE loans in the U.S., as Wells Fargo's acquired Wachovia. In 2010, average outstanding balance on CRE loans decreased to $130 billion as demand for CRE loans remained weak.
Going forward, we wait for the outstanding balance to remain stable in 2011 and then augment for the remainder of our forecast era alongside development in the broader U.S. economy.
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