SEC Edgar Database - October 5, 2007
We anticipate purchasing fee simple interests in a portfolio of 208 single tenant retail banking facilities and eight office buildings collectively known as the SunTrust Bank Portfolio. SunTrust Bank is the principal banking subsidiary of SunTrust Banks, Inc., a financial holding company with its headquarters in Atlanta, Georgia. The properties contain approximately 1,149,131 aggregate gross leasable square feet and are located in eight states and the District of Columbia. We anticipate purchasing these properties from an unaffiliated third party, SunTrust Bank, for approximately $374.9 million in cash, and may later borrow monies using these properties as collateral. We have made an initial non-refundable deposit of $9.4 million against the purchase price. This deposit will be refunded to us if closing fails to occur by December 28, 2007 as a result of the seller’s breach of the purchase agreement.
SunTrust Bank will lease all of the retail banking facilities in the portfolio for a term of ten years, commencing in December 2007 and terminating in December 2017. SunTrust may renew each of these leases for an additional term of ten years, and then for six additional five-year terms. Each of the leases requires SunTrust Bank to pay all taxes, insurance and maintenance expenses from use of the property.
(NOTE: The annual base rent for each property is expected to increase 1.75% each year. The portfolio is expected to be acquired at approximately a 7.2% cap rate.)
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