SouthState in Winter Haven, Fla., entered into a sale-leaseback transaction involving 170 branches.
The $65 billion-asset company, which recently bought Independent Bank in Texas, said in a press release that it will sell the locations to Blue Owl Real Estate Capital for $475 million. South State said it will report a $225 million pretax gain in the first quarter, when the deal closes.
The proceeds are anticipated to be used for general corporate purposes, though the company said it is considering selling underwater securities.
South State agreed to lease the branches, located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia, for an initial 15-year term with three five-year renewal options. Rent will increase by 2% annually.
South State expects to pay $36 million in rent the first year, though the cost will be partially offset with the elimination of $8 million in depreciation expense on the buildings.