US bank Wachovia to sell unwanted banks to REIT

Wachovia Corp plans to sell more than 100 vacant branches to American Realty Capital Trust in 2008 with more expected to follow.

The US banking giant Wachovia will sell more than 100 unwanted branches to the private real estate investment trust, American Realty Capital Trust, in a deal reported to be worth in excess of $100 million (€64 million).

A spokesperson for Wachovia told PERE as the bank consolidated its operations it would sell vacant branches to American Realty, with more than 100 branches expected to be sold in 2008 alone. More will follow, she said.

“This is a continual process in all our markets. We are constantly evaluating our real estate and determining if we need to update some of them, refurbish some or consolidate others as a result of mergers and acquisitions,” she added.

In 2006, Wachovia bought Golden West Financial, the parent company of World Savings Bank which had 285 branches, for approximately $25 billion.

The deal with American Realty provides the REIT with exclusive rights to purchase Wachovia’s surplus branches for an undisclosed sum. A report in the Wall Street Journal cited the deal as worth $100 million.

American Realty Capital, founded by Nicholas Schorsch and based in Pennsylvania, said in a statement in January it planned to raise up to $1.5 billion of equity as a non-traded REIT to be invested in net-leased real estate.