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  Chase Bank


Average Property & Lease

Average Sale Price$4,544,117
CAP Rate (12mo avg with 10+ lease term)4.30%
NOI$192,160
$/Square Foot$600 - $800
Building Size4,000 - 4,500 sf
Lot Size1.00 - 1.5 acres
Lease Term15-20 Yr Ground Lease
Escalations10% every five years
CREDIT RATING
A+
S&P
Aa3
Moody's
view credit rating chart
View Net Lease Property Listings at CALKAIN.COM Last Updated: September 9, 2016
Net Lease Advisor Overview

JP Morgan Chase currently sits as the largest financial institution in the United States with over $2 Trillion in assets. Their retail banking operation features just over 5,000 locations across the U.S. with deposits of nearly $650 Billion as of June 2010. Chase stands as one of the higher rated retail tenants commonly seen in the net lease world.

From a real estate perspective, Chase utilizes 7 different prototypes, depending on location and available site dimensions, with the bank branches ranging from 2,585sf to 4,766 situated on 0.65 to just over 1 acre of land. While they tend to prefer to own their locations, when a new site is opened as part of a lease agreement, they will retain ownership of the improvements through the utilization of a long term unsubordinated ground lease.

Their typical lease is for a term of 20 years with four renewal options at five years per option. Given their high credit and class A real estate requirements, their average cap rates are near the lower range found throughout the net lease world, however their leases do provide for rent growth, with 10% increases every 5 years the standard schedule. Some of the recent leases have featured a troublesome clause, allowing the lease to be assigned to any entity that meets certain financial criteria, such as minimum net worth benchmarks. While the minimum threshold set varies, they do detract from the implied safety of a lease guaranteed by the parent company.

Chase was well positioned to weather the stresses of the recent recession, seizing the opportunity to acquire the ailing Washington Mutual Bank without assuming legacy assets. As part of this assumption, Chase has been able to expand it's footprint into markets previously unable to penetrate, such as Florida. While they have been converting existing locations, look for Chase to secure a dominant presence in each of the newly entered markets within 3 to 5 years, creating numerous net leased assets along their expansion routes.
 

Pros

Cons

  • Investment Grade Tenant
  • Emerged from recent recession as "Best in Class"
  • Ground Lease — completely passive ownership
  • Regular Rental Increases Throughout Lease Term
  • Generally decent size parcel of land in B+ to A locations
  • No depreciation component
  • Relatively low cap rates
  • Assumption clauses in some leases
Tenant Description

JPMorgan Chase Bank, N.A., commonly known as Chase, is a national bank that encompasses the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. It is headquartered in Chicago and is considered one of the "big four" banks in the United States.

Originally known as Chase Manhattan Bank, it was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. It continued to be known Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000. In 2008, Chase acquired the deposits and most of the assets of Washington Mutual.

And some banks are still expanding. JPMorgan Chase & Co., for instance, recently announced plans to build as many as 2,000 branches over the next five years, largely in California and Florida.


CHASE BANK TREND
CAP Rate

2013 avg: 5.52%

2014 avg: 5.57%

RECENT SALES

Chicago, IL

$2,672,727 | 5.5%

Pembroke Pines, FL

$5,600,000 | 5%

MORE INFO
www.chase.com
Google Finance: JPM
Google News: JPM