Overview

While Bank of America has experienced its share of hardships resulting from the recent bank crisis and recessions of the last quarter century, they are still counted amongst the corporations too big to fail. Given their industry dominance and deposit volume strength, coupled by the sheer amount of locations across the country, it is still clear that net lease investing with Bank of America has not decreased. On average, you’ll find 1 to 1 1/2 acre, well maintained lots with roughly 3500 to 4800 sq. ft. These are usually sold as NNN investments in the form of unsubordinated ground leasing and considered passive investments, selling well below typical capitalization rates for transactions based in fee simple NNN ownership. Typically anywhere from 50 to 125 basis points below average. Note that the tenants at each branch will normally own the buildings during the life of the lease, and they may also incur initial building costs. The landlord or investing entity usually owns the ground itself (as part of the ground leasing arrangement). However, property ownership will revert back to the investor or landlord upon default or lease termination. With rental escalations ranging between ten and fifteen percent every 5 years, ground leasing remains desirable for investing due to standard 15-20 year structuring with up to 5 separate 5 year renewals that can be utilized.