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Growing the STNL Platform | SunTrust Net Lease Offering in Atlanta MSA (Alpharetta, GA)

OCTOBER 2, 2019 | THE PALOMAR GROUP

The Palomar Group continues to grow their single tenant net lease platform having recently taken a SunTrust bank branch to market in the Atlanta MSA (Alpharetta, GA).  The deal is being offered at a cap rate of 5.5% inking out to a price point of $3,190,000.  SunTrust’s current lease expires January 31, 2030, an investor will benefit from a rental increase in 2022 and 2027 providing very attractive NOI growth.  Recently the announcement was made that SunTrust is merging with BB&T, the new banking entity will be Truist.  Truist will be the sixth largest US Bank holding company, serving more than 10 million households in the US.  The property is an outparcel to a Publix-anchored shopping center located at the primary intersection of the market.

The STNL bank branch market has continued to be one of the strongest in the single tenant space.  The market has stayed robust because of the strong guarantee behind the leases.  SunTrust boasts an A- credit rating with over 1,400 branches.  Bank leases offer a strong backing with favorable lease terms for an investor.  Bank branches are typically located at great locations with a high traffic counts, solid visibility and high density.  These fundamentals present multiple options for retenanting the property in the event the bank branch closes, particularly bank branches that have drive thru’s as they are ideal for QSR tenants (quick service restaurants).