Green Building Series: Wells Fargo’s Green Financing

It comes as little surprise that the credit crunch has had a crippling effect on real estate lending. Many lenders have, however, continued to provide financing to developers of green buildings in the past year. One prominent source of funds has been from Wells Fargo & Company, which just announced a recent milestone in green financing in that it has provided more than $2 billion in financing secured by real estate with green structures. It has also doubled its commitment to high performance, LEED-certified buildings in the past 19 months.

While Wells Fargo has clear long-term goals of corporate responsibility and environmental stewardship, it is in the business of making sound investments. Larry Chapman, head of Commercial Real Estate at Wells Fargo, stated, “We can achieve long-term value for our businesses and our society though the development of high performance, resource-saving buildings.” In a time when there is great debate over the worth of all real estate, Wells Fargo is apparently willing to assume the risk that these new green buildings will not be subject to the type of expected depreciation of much of the commercial real estate market. Developers should keep this in mind as they attempt to secure financing for their future projects.

Geoff White is a Senior Associate in the Commercial Transactions and Real Estate Group at Frost Brown Todd. Mr. White is licensed to practice law in Kentucky and Ohio and is a member of the Kentucky Chapter of the U.S. Green Building Council. 

Posted by: Geoffrey M. White