Net Lease Profile: BB&T

BB&T Corporation (Branch Banking & Trust) is an American bank with assets of US$157 billion (March 2011), offering commercial and retail banking services. From a net lease investors perspective, here are some pros and cons: 

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.

Cons:

• As BB&T expands through acquisition, overlap of retail branches may occur.
• Retail banking industry outlook on necessity of physical locations is evolving.
• When located as a part of a shopping center, some use restrictions may apply.

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