SunTrust's CRE Business is On Fire

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When investors list the up-and-coming real estate markets they’re most amped up about, the readiest answers—places like Miami, Nashville, Atlanta and the Carolinas—tend to have three things in common: sunny weather, low tax bills, and a latitude south of the Mason-Dixon line. For one U.S. commercial real estate bank with one of the boldest success stories of the last decade, a fourth factor unites those markets as well: They’re all right in its backyard.

Ten years ago, Atlanta-based SunTrust Bank, whose history dates back to 1891, had barely any commercial real estate lending book to speak of. But under the leadership of Kathy Farrell, who’s been in charge of commercial real estate lending since 2016, the bank’s property debt business has been on a tear. Lending volumes have approached $10 billion in recent years, and the bank’s real estate balance sheet is almost twice that figure. Meanwhile, SunTrust’s upcoming merger with BB&T, based in North Carolina, is poised to position Farrell’s team as part of what should easily become the Southeast’s most powerful native financial institution. The deal will create America’s eighth-largest bank overall, according to Standard and Poor’s, immediately behind U.S. Bank and Morgan Stanley on the list.

Because it started from scratch just a decade ago, SunTrust has never been weighed down by floundering loans on suburban shopping malls—the kinds of deals that have dinged the balance sheets of many of Farrell’s august competitors. Still, Farrell’s been a fearless retail lender in her own right, delivering financings to some of the Southeast’s most creative and high-profile mixed-use retail developments. Eager to hear more about sites like the Atlanta Braves’ new ground-up retail district, The Battery, as well as urban reclamation projects that are changing the face of America’s ninth-biggest metropolitan area, Commercial Observer flew down to the Peach State last week for a long-overdue chat with an inimitable leader on the Sun Belt’s real estate finance scene. [ Commercial Observer ] - Matt Grossman

Keith Lee