While all banks were significantly challenged during the recent recession, BankUnited was purchased by a large investor group with a significant capital infusion, creating a new, stable platform from which to grow. Having expanded from their Miami, FL headquarters throughout Florida, they are currently working to penetrate the New York City metro area to better serve their large client base with dealings in both markets.
Their expansion and continued growth has been a testament to their creative founding. Many of the larger institutions expanding in Florida at the same time as BankUnited were willing to sign long term ground leases with rents exceeding $200k-$300k annually, requiring the bank to then build and pay for all of the physical improvements, often times costing in excess of an additional $2M. Conversely, BankUnited took a more conservative approach to their expansion; renovating and redeveloping old banks, QSRs, and restaurant locations, minimizing their occupancy cost while maximizing their visibility and accessibility to accommodate today's banking customer. This is important to the net lease investor as it adds a layer of protection through lower rents and $/sf costs on average for a BankUnited site versus their peer group.
Pros:
- Leases afford rental increases throughout the primary term
- Investment grade tenant, rated Baa3 by Moody's (Equivalent to S&P:BBB-)
- Many locations are occupied as fee simple leases, allowing for depreciation versus the preferred ground lease scenario of most other bank brands
Cons:
- 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
- Some Leases require landlord obligations to roof and structure
View full BankUnited tenant profile.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
