Wells Fargo & Co., the lender that gets just 3 percent of its revenue from non-U.S. markets, plans to build out its real estate investment-banking business as part of a push into the U.K.
The bank will rely on subsidiary Eastdil Secured LLC, one of the biggest brokers of U.S. commercial property sales, to advise British customers on deals and help them find financing, said Mark Myers, head of San Francisco-based Wells Fargo’s commercial real estate business. The firm already had announced plans to expand lending backed by U.K. commercial properties.
“In the very near term we see some opportunities to leverage some of our capabilities using the Eastdil Secured platform,” Myers, 58, said yesterday in a phone interview.
Wells Fargo Chief Executive Officer John Stumpf, 59, is looking beyond the U.S. after the bank became the nation’s leading home-lender, biggest commercial-property servicer and owner of the largest retail-branch network. The U.K. expansion began in late 2011 with a focus on loans for properties in London’s central business district and has since spread outward.
The bank agreed to purchase the Eurohypo U.K. real estate lending unit, which includes about 4 billion pounds ($6 billion) of “high-quality” assets, from Frankfurt-based Commerzbank AG, according to a statement yesterday. Dallas-based Loan Star Funds’ will buy part of the portfolio, consisting of about 1.3 billion pounds of non-performing loans, with financing from Wells Fargo.
Eastdil Secured was the top U.S. commercial real estate broker in 2012, representing sellers on $30.4 billion in transactions for 24.8 percent of the market, according to a Feb. 13 report in Real Estate Alert, a trade publication.
“Eastdil operates a relatively small number of offices that specialize in trophy assignments from giant institutional clients,” according to Real Estate Alert.
Eastdil has about 200 workers in 13 U.S. offices and recently expanded into the U.K., according to its website. The firm has completed more than $590 billion of transactions since 2006, according to the website.
Wells Fargo will offer other banking products to U.K. commercial real estate clients, including derivatives such as interest-rate swaps and options, Myers said.
“We work very closely with other parts of the bank,” and the expansion in the U.K. won’t be any different, he said.