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A major multi-property lease renewal deal between SunTrust Banks Inc. and American Finance Trust, a non-traded net lease REIT, offers insight on how the ongoing bank branch consolidation may affect owners of bank branch retail property in coming years.

Under the deal, 20% of American Finance Trust’s 213 individual SunTrust bank branches will lose a tenant. At the same time, the lease renewal agreement removes a lot of uncertainty for American Finance Trust by securing the bank’s commitment for most of the remaining properties.

For American Finance Trust, it has been a big concern. SunTrust branch properties account for about 9% of its property holdings and almost 18% of its annual revenue. The leases for all but four of the 213 properties were set to expire in December 2017.

The shrinking number of retail bank branches has been a trend for several years, but according to a recent Citibank analysis it has yet to peak. According to some projections, U.S. banks could still close more than 30,000 branches in the next 10 years. And that has become a major concern for landlords and investors. [ For more on that story see Silicon Valley Will Make Thousands of Bank Branches Disappear.]

SunTrust is no different. As of year-end 2015, SunTrust operated 1,401 full-service banking offices, it owned 562 and leased the remainder. Its bank branches are primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia and the District of Columbia. In the past 12 months, it has closed 16 branch offices, relocated one and opened one new branch.

In keeping with the ongoing trend, SunTrust is not renewing 45 of its leases covering 230,000 square feet with American Finance Trust. The REIT said it will begin the process of selling off these locations.

But the good news for the REIT is that SunTrust signed 12-year lease renewals on 75 of the properties covering 350,000 square feet. Straight line rents on these properties will increase from $9.7 million to $10.8 million.

SunTrust signed 10-year renewals on another 61 properties containing 321,000 square feet. Straight line rents on these properties will increase from $8 million to $8.7 million.

SunTrust also signed 15-year lease renewals on six properties totaling 46,000 square feet with straight line rents increasing from $1.9 million to $2.2 million.

In addition SunTrust has agreed to buy eight of the properties totaling 64,000 square feet for $28.9 million or about $450/square foot. American Finance Trust will use a portion of those proceeds to reduce its debt by $13.4 million. SunTrust has delayed making a decision on the remaining 18 properties covering 137,000 square feet.

Perhaps even more importantly for American Finance Trust, the deal with SunTrust eliminates uncertainty on 160 properties by offering long-term team lease extensions with annual rent increases of 1.5% annually for 10 years.

One other net lease REIT is a similar situation. National Retail Properties Inc. owns 121 SunTrust branches, which have a 2018 expiration date.

In its first quarter earnings conference call this month, Craig Macnab, chairman and CEO of National Retail Properties, said they were in the early stages of talking to SunTrust.

“I am overwhelmingly confident that in the next couple of years, we will have resolved a new transaction with them,” McNab said. “But, we’re only in the early stages.”