BB&T, SunTrust Take Big Lease at Charlotte Trophy Tower

With a merger in the works, the financial institutions commit to more than half of Cousins Properties’ 970,000-square-foot Hearst Tower. Also included in the deal: an option to buy the property.
Hearts Tower. Image courtesy of Cousins Properties

BB&T Corp. and SunTrust Banks Inc. will lease more than half of the 970,002-square-foot Hearst Tower in Charlotte, N.C., when the two banks merge later this year. Cousins Properties, owner of the 46-story, Class A+ mixed-use property, said the combined company is taking 561,000 square feet of space in a 15-year lease.

The deal includes an option for the building at 214 N. Tryon St. to be purchased by the combined company for $455.5 million, according to Cousins. The one-time purchase option was requested by the banks and is exercisable through the fourth quarter. If the office tower is sold, the purchase would close during the first quarter of 2020.

Company officials said BB+T and SunTrust, which will become Truist Financial when the $66 billion merger is completed later this year, will start moving into the tower in phases beginning in August and finishing in June 2021. Truist will eventually have about 2,000 employees at Hearst Tower. BB&T is currently headquartered in Winston Salem, N.C., and SunTrust has its headquarters in Atlanta. Truist will be the sixth-largest bank in the U.S.

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Bank of America, the office tower’s previous owner, will be among several tenants currently occupying space in the building that will be moving out of the tower to make room for the new bank. Bank of America leases about 315,000 square feet and is expected to leave the building in phases. The other tenants exiting the building were not identified.

Colin Connolly, president & CEO of Atlanta-based Cousins, said the deal creates long-term value for Cousins shareholders and validates the office REIT’s strategy to own trophy office towers in the best urban submarkets throughout the Sun Belt. Cousins acquired the Hearst Tower in Uptown Charlotte in 2016, when it merged with Parkway Properties. Parkway Properties had owned the tower since June 2012, when it completed the purchase from the Bank of America for $250 million, or about $258 per square foot.

Another merger planned

Cousins has another merger pending. In March, the company announced a deal to acquire Dallas-based TIER REIT in an all-stock transaction that will create a combined $7.8 billion company. Expected to close later this year, the new company will have 21 million square feet of office space, including trophy office properties in premier submarkets of Atlanta, Austin, Charlotte, Dallas, Phoenix and Tampa.

Cousins is currently developing a new $550 million corporate headquarters for Norfolk Southern Corp. in Atlanta. The transportation company is relocating from Norfolk, Va., to a 1 million-square-foot office development in Atlanta’s Technology Square district. Construction is underway and is slated for completion in late 2021.