As mobile banking and automated teller machine use increase, diminished foot traffic in bank locations led to shuttered branches. Nine out of ten households now utilize online banking and four out of ten use mobile banking, eliminating the need to visit a branch for normal transactions.
As branch closures continue to outpace openings, the banking industry is shifting their focus to technology and reassessing the need for brick and mortar establishments. The shrinking footprint of banks leaves enticing property up for grabs.
Attractive acquisition targets
Former bank branches tend to be prime commercial real estate since banks used stringent selection criteria for choosing locations. Banks often chose property on high-traffic corner lots with easy access and drive-through lanes. Branch buildings generally range from 900 to 30,000 square feet.
One caveat, before purchasing determine if the branch has a vault. If so, consider negotiating the cost of vault removal into the purchase price.
Reimagining former branches
For bank branches offer nearly limitless development options. New tenants of vacated branches include coffee shops, restaurants and medical offices. Old branches can even become a new home for different financial institutions. For dated or less than desirable buildings, developers can raise the property and build something entirely new.
Not all former branches will easily transition to reuse or re-tenanting if nearby demographics for shopping patterns deteriorated. However, given their availability investors and developers should consider them as a possible development opportunity.