MetLife, SunTrust Form $5B Partnership

By Barbra Murray, Contributing Editor

SunTrust’s Walt Mercer

It’s a union sealed with a multi-billion commitment.  MetLife Inc. and SunTrust Banks Inc. have joined forces on a major partnership in which MetLife’s new investment management platform, MetLife Real Estate Investors, will originate and manage as much as $5 billion in commercial real estate mortgages to be financed by SunTrust.

It’s not every financial entity that is willing to make a $5 billion commitment, but the reasoning behind SunTrust’s pledge is simple. “We’re pleased to be working with MetLife as our strengths complement each other,” Walt Mercer, executive vice president & head of Commercial Real Estate at SunTrust, told Commercial Property Executive.

MetLife brings to the table coveted expertise in originating commercial mortgages and private placement debt, in addition to that certain know-how in successfully investing in real estate equities. “This partnership is a strong validation of our industry-leading platform and an endorsement of our track record, market position and experience in the real estate investment space,” Robert Merck, global head of MetLife Real Estate Investors, told CPE.

It’s just the package that SunTrust is looking for as it continues to pursue fruitful opportunities during the rebound of the commercial real estate market.

MetLife’s Robert Merck

The collaboration is a big step for both MetLife’s and SunTrust’s current goals. “It aligns with our corporate strategy to focus on businesses that are less capital intensive,” Merck added. “From a practical standpoint and from our perspective, it leverages our strong capabilities in the real estate sector to do more business. From SunTrust’s perspective, it helps them to increase the quality of their commercial loan portfolio.”

The joint venture’s concentration will be on core real estate in top quality properties in top tier markets, with both floating and fixed rate loans, on major property types. As Walt Mercer concluded, “We are focused on buying a piece of MetLife-originated loans in office, retail, multi-family, and industrial properties.”

Many a marriage in the U.S. comes to an end after just a few years, and so will that that of MetLife and SunTrust, albeit on a planned timeframe and, most likely, a happy note. The partnership between the global insurance provider and the bank with assets totaling $171.5 billion will continue for a designated period of three years.