How Will the BB&T and SunTrust Merger Impact Charlotte?

Thursday, March 21, 2019

Real estate indicators by Senior Director Allan Lynch and Analyst Ryan Bergin, who are part of HFF Carolinas' Multi-Housing Team.

BB&T (NYSE: BBT) and SunTrust (NYSE: STI) announced a merger that will form the nation’s sixth largest bank. This $66 billion all-stock deal is expected to close in the fourth quarter of 2019 after federal approval. Driven by collective need to invest in technology and build enough scale to compete with larger competitors like Bank of America and JP Morgan Chase, the merger signals a significant employment boost for Charlotte.

The merged bank will be headquartered in Charlotte, North Carolina, where BB&T and SunTrust currently have a combined 2,000 total employees. Many of the existing jobs are in branches and are redundant given duplicative branch networks. In other words, this is a major job announcement very likely adding more than 10,000 new jobs to the Charlotte market.

To estimate the number of jobs the merger will generate in Charlotte, HFF looked at comparable banks in their respective headquarter cities. Impressively, the current “Top 10” banks average 13,600 employees in their respective home markets, offering a bullish glimpse into what the subject merger may mean for Charlotte’s labor market.

 

 

Catalysts for Deal

  • Both BB&T and SunTrust have grappled with dated branch networks and inferior consumer technology compared to nationally chartered banks such as JPMorgan Chase and Bank of America.
  • The combination is expected to realize $1.6 billion in synergies while giving the new entity more resources to invest in technology and hire financial technology specialists.
  • A wave of job announcements focused around theme of financial technology and innovation including AvidXchange (1,200 job expansion, Dec. 2018), Barings (600 new jobs) and Dimensional Fund Advisors (200 new jobs).
“Traditional investment [centers] such as New York, Boston and San Francisco are losing ground to smaller cities, including Denver, Atlanta and Charlotte.” – Financial Times (March 2, 2019)

 

In conclusion, the new bank resulting from the BB&T and SunTrust merger will be headquartered in Charlotte, solidifying the "Queen City’s" position as the second-largest banking center in the U.S. In turn, an estimated 13,600 jobs will be injected into the heart of the city, bolstering the already booming commercial real estate market. 

About HFF Carolinas' Multi-Housing Team

HFF Carolinas' Multi-Housing Team was formed in August 2015 and includes Allan Lynch, Caylor Mark, Justin Good, Jeff Glenn, Sara Wagman, Michelle Ashlin, Hallie Booe and Ryan Bergin.  Notable investment advisory transactions closed by the team include an eight-property multi-housing portfolio in Research Triangle Park, Centric Gateway and Weston Corners. HFF Carolinas' Multi-Housing Team is part of HFF's national multi-housing platform. HFF is a top-producing capital markets intermediary in the country for multi-housing assets having closed nearly $248 billion in more than 9,460 transactions since 1998. Our capital markets advisors are experts in providing construction, interim and permanent debt alternatives. Additionally, HFF provides equity placement options, including joint ventures, participating debt and mezzanine financing structures, ground-up development capitalization and traditional outright sale alternatives. Learn more about HFF's multi-housing platform.

About Allan Lynch

Allan Lynch is a senior director in HFF’s Carolinas office. He has more than 15 years of industry experience and primarily focuses on multi-housing and institutional land investment advisory opportunities throughout the Carolinas and southeastern United States.

Mr. Lynch joined the firm in August 2015. Prior to HFF, he was a vice president at Cushman & Wakefield Thalhimer, a Cushman & Wakefield regional affiliate, where he founded the Cushman & Wakefield Thalhimer multi-housing division and established a market-leading team within 18 months. Prior to that, Mr. Lynch worked with Engler Financial Group of Atlanta, where he was part of a team that closed more than $1.5 billion in investment sales and joint venture equity transactions.  Previously, he also has worked at Trammell Crow Company and Anglo Irish Bank.

 

 

About Ryan Bergin

Ryan Bergin is an analyst in the Carolinas office of HFF. He is primarily responsible for performing financial and market analysis, preparing offering documents and coordinating the due diligence process for the multi-housing investment advisory team. 

Mr. Bergin joined the firm in February 2019. Prior to joining HFF, he worked as a project management analyst for MUFG Bank’s Global Markets team in New York City. Mr. Bergin majored in business administration with a concentration in finance and marketing while attending the University of Richmond for his undergraduate degree.

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