While American Financial Realty Trust officials have yet to say why they canceled their Nareit REITWeek meetings--leading to speculation that significant changes may be imminent--they continue to announce agreements that are, according to a spokesperson, pieces of the company's broader initiative.

The latest news from the Jenkintown, PA-based REIT is a five-year sourcing agreement with New York City-based investment banking firm Sandler O'Neill & Partners LP, which specializes in serving the financial industry. The agreement focuses on middle market financial institutions that have between $500 million and $40 billion in assets. According to the AFR spokesperson, the FDIC estimates those banks in that category own $92 billion of real estate on their balance sheets. About 3,500 to 4,000 banks fall into that mid-tier category. The investment bank has already held discussions with about 1,000 of those that have expressed interest in doing sale-leasebacks, the spokesperson says.

The relationship is being carried out through the investment bank's affiliate, Sandler O'Neill Mortgage Finance LP, though AFR's spokesperson says it will not involve the provision of debt financing. "We believe that by working with AFR, our clients will receive certainty of transaction consummation with seamless execution from analysis to transaction funding," Thomas Killian, a principal in Sandler's investment banking group and its manager of the sale-leaseback effort, states in an announcement. "Our ability, with AFR, to offer clients a premier sale-leaseback product is consistent with our ongoing focus on helping our clients develop and manage their long-term capital plans to optimize franchise value."

AFR is singular in its specific focus on the niche of properties net leased to banks and other financial institutions, but bank properties are among the priciest out there. The Q2 Quarterly Net Lease Pricing Monitor from Banc of America Securities LLC analysts Ross Nussbaum and Dustin Pizzo in New York City indicates that bank properties have the lowest cap rates of any category, coming in at about 5.5%.

The Boulder Group in Northbrook, IL, which just released its Net Lease Bank Branch Market Report this month, says its study also found that properties had a mean cap rate of 5.5%.

"Net-leased bank branch locations are an in-demand net lease asset class," notes the report by Boulder Net Lease Funds LLC principal and research director Jeff Rothbart. "While there are not nearly as many banks available as there were net lease restaurants…these assets are ever becoming more popular due to the lower pricing points and high credit ratings."

Of the bank branch properties available for purchase, "just under 80% have credit ratings of investment grade or above, with the balance being unrated entities," the report notes. "As would be expected given the demand for net lease retail assets and the importance investors in the same place on the tenant's creditworthiness, the data contained herein supports the notion that the better the bank's credit, the lower the cap rate."