SunTrust TENANT OVERVIEW


Net Lease Advisor Tenant SunTrust Bank

Pros

  • Investment grade tenant
  • Leases afford rental increases throughout the primary term, many with annual rental increases
  • Generally well located, either as out parcel to grocery anchored shopping center
  • Many locations are occupied as fee simple leases, allowing for depreciation versus the preferred ground lease scenario of most other bank brands
  • Essential Retail

Cons

  • Retail banking industry outlook on necessity of physical locations is evolving
  • Mainly an east coast bank

Earnings Highlights

Q1 Summary
  • Reported a Q1 2020 Net Income of $1B which was an increase of $200M year over year
  • Total revenue increased $2.7B compared to the same period in 2019

Tenant Description

SunTrust Bank is one of the largest banks in the US. In December 2019, SunTrust Banks, Inc., announced its merger with Winston-Salem based bank BB&T to from Truist Bank, which will be based in Charlotte, NC. Truist is now the nations 6th largest bank and serves around 10 Million consumer households nationally.

SunTrust Bank, like most banks, is an attractive net lease asset. Banks tend to build their reputation on longevity and trust. These factors lead to a low risk and long term tenant.

SunTrust Bank is a diversified financial services holding company whose businesses provide a range of financial services to consumer and corporate clients. The Company operates in three segments: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking. Through its principal subsidiary, SunTrust Bank, the company offers a full line of financial services for consumers and businesses including deposit, credit, and trust and investment services. Additional subsidiaries provide mortgage banking, asset management, securities brokerage, and capital market services. SunTrust operates primarily within Florida, Georgia, Virginia, Maryland, and North Carolina. SunTrust provides clients with a selection of branch-based and technology-based banking channels, including the Internet, ATMs, and twenty-four hour telebanking.

Average Cap Rate
5.72%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,625,000
NOI $148,815
$/Square Foot $525 - $656
Building SF 4,000 - 5,000
Lot Size 0.5 - 1.5 Acres
Lease Term 15 - 20 Years
Escalations Varies
Stock Symbol TFC:US
Credit Rating
S&P A-
Moody's Baa1
Average Cap Rate Trend
5.50%
2019
5.75%
2020
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Apex, NC 5.75%
Nashville, TN 5.54%
Jonesboro, GA 6.18%