SunTrust’s Move is Official

By David Flaum
– The Commercial Appeal –

SunTrust Banks Inc. made its move from Downtown to East Memphis official on Friday.

Come 2009, the bank will leave its digs at One Commerce Square for a new Boyle Investment Co. office building at 999 Shady Grove in Boyle’s Ridgeway Center office park.

And it will move workers from five other locations around Memphis to the 50,000 square feet it plans to lease there while it looks for Downtown space for a bank branch, private banking and supermarket banking arm.

"The banking business, our office space needs and the Mid-South market have changed dramatically over the last 10 years," said David Popwell, president and chief executive officer of SunTrust Bank in Memphis.

SunTrust’s move, first reported in February, is seen as a setback for the office market, but won’t stymie the Downtown renaissance or a planned marketing campaign, boosters say.

"The bank is still going to have a large retail presence and expanded offices Downtown which will not be a whole lot smaller than their current service for Downtown employees," said Andy Kitsinger, director of planning and development at the Center City Commission. "What they’re vacating did not have a lot of employees per square foot, so it won’t have a lot of impact."

Hertz Investment Group of California is interested in buying the building, which reflects confidence in the Downtown office market, Kitsinger said.

In all, SunTrust, part of the Atlanta-based company that is going through a systemwide cost-cutting effort, will shed 80,000 square feet of space in Memphis, Popwell said.

"This is something they should have done before now," said Christopher Marinac, analyst for FIG Partners in Atlanta.

SunTrust moved into the Memphis market in 2004 when it bought National Commerce Financial Corp., the parent of National Bank of Commerce. With bank operations centralized in Atlanta, "they don’t necessarily have to be on the ground in Downtown," Marinac said.

But they do need their people on the ground to follow the business — much of which is in the eastern suburbs near the new offices, he said.

Many of those operations — real estate finance, trust and asset management, medical private banking and mortgage, for example — moved east several years back, Popwell said.

That’s because most of the customers for those businesses and SunTrust’s competitors for them are out east, he said.

SunTrust’s new offices will be in one of two 150,000-square-foot buildings Boyle is putting up on Shady Grove, said Mark Halperin, executive vice president in charge of development, management and leasing.

Construction is about to start on the SunTrust building with the first tenants expected to move in around the summer of 2008, he said.

SunTrust facilities, which will include a bank branch and a drive-in, should be ready by January 2009, he said.

The bank’s lease for 155,000 square feet at One Commerce Square was signed in 1999, although NBC had been there since it opened in 1972. When the lease was made, NBC had information technology and operations centers there along with retail credit underwriting, audit, investor relations and other functions.

Most of those went away in 2000, Popwell said, when NBC’s parent merged with CCB Inc. of Durham, N.C.

"We’ve been sitting on a fair amount of vacant space since 2001," he said. "It’s better for the community in the long run (to leave) than to irresponsibly stay in leases we don’t need."

SunTrust is not departing Downtown entirely.

The company is looking for 20,000 square feet for a bank branch, offices for 10 people in private banking — seven current bankers, with added brokerage, trust and mortgage people and NCBS, the supermarket banking arm of SunTrust.

The bank hasn’t picked an exact location, but the office will be near One Commerce Square, Popwell said.

The lockbox and proof operation — check processing — will move from One Commerce Square, too. Leaders of that business are looking for 35,000 square feet near the airport.

"We’re doing what we need to do to take care of our customers and the people who work for us," Popwell said.