Wells back in realty lending.

After being battered by waves of bad real estate loans, Wells Fargo & Co. is again dipping its toes into the property waters.

The San Francisco bank is arranging a $100 million loan for one member of a real estate partnership that is purchasing CenterMark Properties Inc., a major shopping center owner, from Prudential Insurance Company of America.

The purchase price for what is believed to be the largest acquisition of regional mall shopping centers in the United States is $1 billion.

New Set of Circumstances

Wells' role in funding the purchase reflects the bank's confidence that the bulk of its real estate problems are past and the fact that creditworthy real estate companies are looking to borrow again, said analysts.

"The only issue before was that Wells had too much in real estate loans, but I think they have now opened the door very cautiously to new business," said John Leonard, an analyst with Salomon Brothers Inc.

Mr. Leonard added that Wells has indicated that it wants to continue to reduce its real estate portfolio. Nevertheless, the runoff of real estate loans has been dramatic, leaving the bank room to lend. Wells has made other real estate loans this year, analysts said.

The purchase of CenterMark is being done by a partnership of General Growth Properties Inc., Westfield Holdings Ltd., and Whitehall Street Real Estate Limited Partnership III.

The purchasers will pay a total of $500 million in cash and assume roughly $500 million in existing debt, said Martin Bucksbaum, chairman and chief executive officer of General Growth.

Wells will assemble a bank group to provide about half of the $200 million cash investment General Growth will need to make, said Mr. Bucksbaum. Wells isn't underwriting the deal.

A Wells spokeswoman confirmed the bank's role.

General Growth, which is based in Des Moines, Iowa, has borrowed money from Wells Fargo for the past 10 years, said Mr. Bucksbaum. He added he heard from a large number of foreign and domestic banks about financing after announcing plans to raise $400 million through an initial public offering of stock.

Citibank, Union Bank of Switzerland, and even some Japanese banks have come calling, Mr. Bucksbaum said.

The banks' interest was "a pleasant surprise," he said.

With banks reluctant to lend in the past few years, property companies like General Growth raised billions of dollars in equity as real estate investment trusts (REITs), and have also raised debt financing by securitizing their holdings.

Now some banks such as Wells are lending again and there's been a sizable increase in loans to REITs. Earlier this year, for example, the Taubman Real Estate Group raised $150 million from a group of banks. And bankers said a number of other REITs have arranged or are seeking revolving bank credits in the range of $75 million to $125 million.

The real estate loans, however, are being made on more conservative terms than in the past. Loans are typically in the range of 60% to 70% of the value of the property they are secured by, with well-documented financial reports. In the 1980s, banks made loans that were up to 110% of the property value and which were supported by earnings projections and no appraisals.

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