TD Bank TENANT OVERVIEW


Pros

  • Strong global credit tenant
  • High visibility locations
  • Long absolute NNN leases
  • 10%+ rental increases

Cons

  • High initial rental rate
  • The tenant owns the building
  • Ground leases provide little to no depreciation
  • Lower cap rates

Tenant Description

TD Bank is one of the 10 largest banks in the US.

TD Bank, (NYSE: TD) is expanding into major markets across the eastern United States. TD Bank's solid footing and strong investment grade credit rating, S&P AA-, make it a very attractive commodity to passive investors in the NNN investment market.

TD Bank is actively growing its network of bank branches and demands highly visible locations in both urban and suburban settings. Generally, sites are 1.00 - 1.5 acres with improvements of 3,500 to 4,800 square feet and are sold as unsubordinated ground leases* to NNN investors.

*In a ground lease, the investor/landlord owns the ground and the tenant (typically) builds and owns the improvements. The tenant leases the ground from the investor/landlord and on the tenant's default or other termination of the lease; the building becomes the property of the ground owner. Ground leases are extremely passive investments and generally sell at 50 to 125 basis points below the average cap rate for NNN "fee simple" ownership of ground and structure transactions leased by the same tenant.

The TD Bank ground lease is attractive to investors because they typically have an initial term of 15 to 20 years with up to five (5), five-year renewal options. In addition, the TD Bank ground lease provides rent increases of 10-15% every five years.

TD Bank is one of the 10 largest commercial banks in the US, with more than 26,000 Employees and deep roots in the community dating back to 1852. TD Bank offers a broad array of retail, small business and commercial banking products and services to more than 9 million customers through its extensive network of more than 1,257 retail locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas, and Florida. In addition to banking products, TD Bank and its subsidiaries provide clients with comprehensive wealth management services through TD Wealth Management, and insurance products and services through TD Insurance, Inc., one of the largest insurance agencies in the Northeast.

TD Bank is a member of TD Bank Financial Group of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker: TD. TD Bank "America's Most Convenient Bank®", has proudly provided unparalleled convenience and customer service for more than 150 years. The company first opened its doors as Portland Savings Bank in Portland, Maine, in 1852, and later grew through a series of mergers and became Peoples Heritage Bank in 1983. In 2000, Peoples Heritage Bank, through several acquisitions, expanded deeper into New England and took the name Banknorth. In 2004, Banknorth caught the eye of TD Bank Financial Group. TD Bank Financial Group soon became Banknorth's majority shareholder and the company became known as TD Banknorth. On March 31, 2008, TD Bank Financial Group acquired Cherry Hill, New Jersey based Commerce Bank with a strong presence in metro New York, Philadelphia, Washington D.C. and South Florida. The acquired entities were rebranded as TD Bank, America's Most Convenient Bank in September 2009, completing the merger of the companies and uniting them under the TD Bank brand name.

finviz dynamic chart for  TD
Average Cap Rate
4.30%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $5,165,000
NOI $227,486
$/Square Foot $950
Building SF 4,400
Lot Size 1.3 Acres
Lease Term 20 Years
Escalations 12% Every 5 Years
Stock Symbol TD
Credit Rating
S&P AA-
Moody's Aa1
Average Cap Rate Trend
4.79%
2015
4.18%
2016
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Greenlawn, NY 4.35%
St. Petersburg, FL 4.00%