SunTrust Signs Major Lease Deal Trimming 45 Branches, Renewing 160 Locations

May 27, 2016
Agreement Covering Long-Term Renewals on 160 Branches and Purchase of Eight Others Removes Uncertainty for American Finance Trust

A major multi-property lease renewal deal between SunTrust Banks Inc. and American Finance Trust, a non-traded net lease REIT, offers insight on how the ongoing bank branch consolidation may affect owners of bank branch retail property in coming years.

Under the deal, 20% of American Finance Trust’s 213 individual SunTrust bank branches will lose a tenant. At the same time, the lease renewal agreement removes a lot of uncertainty for American Finance Trust by securing the bank’s commitment for most of the remaining properties.

For American Finance Trust, it has been a big concern. SunTrust branch properties account for about 9% of its property holdings and almost 18% of its annual revenue. The leases for all but four of the 213 properties were set to expire in December 2017.

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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.