Mid-America Real Estate Corp.’s Net Lease Investment Group recently compiled information comparing net lease data among the top nine banking chains in the country as a service to net lease investors.
“Clients are always wondering how one tenant compares to another and what makes one retailer’s cap rate more aggressive than the other,” said Mid-America investment broker and co-author Tom Fritz. “This study illustrates much more than that by rating each bank among different categories such as total deposits, annual NOI (net operating income), average deposits per branch, and of course, CAP rate, to name a few.
“For example, Bank of America may rank number one in terms of average deposits per branch, but ranks sixth in terms of NOI and trades at a slightly higher cap rate than PNC or Chase bank. It also shows why a Fifth Third ground lease will trade 25-50 basis points higher than Wells Fargo, when the lease terms are exactly the same.”
The “Top 9 Banks” include (in order of credit ranking): US Bancorp, Wells Fargo & Company, Bank of Montreal, JP Morgan Chase, The PNC Financial Services Group, Bank of America Corp., KeyCorp, Fifth Third Bancorp and TCF Financial Corp. Financial information on each bank was obtained from Yahoo! Finance and all numbers are rounded. The credit ratings were derived from S&P (2012).
“If I’m an investor looking to place $3 million and I’m targeting a 5.00-5.50 percent yield,” Fritz said, “I want to know exactly where I can get the most for my money in terms of credit, lease term, and financial strength. This study breaks it down and points out where the differences exist.”
The study was co-authored by Tom Fritz, Mark Goldberg and Bill Wright of Mid-America Real Estate Corp.
