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.
The Blue Vault Summit could not have been more perfectly timed. This gathering of the Broker Dealer and Sponsor communities provided insightful and open discussion from several vantage points. These conversations are paramount, especially in a time of significant regulatory change.