Today, more and more people are doing their banking online or at ATMs. What does this mean for the nation’s approximately 90,000 bank branches?
According to an article from National Real Estate Investor, it might mean a 20 percent reduction in the number of branches over the course of the next five years. Wells Fargo alone is set to drop 450 branches in just the next two years.
This presents a potentially valuable opportunity to real estate investors and developers.
The Benefits Of Buying Bank Branches
Banks have historically been very choosy about their branch locations. Bank branches are frequently in good locations, on corner lots, with parking and drive-through lanes. Essentially, they are prime commercial real estate.
Empty bank branches can be turned into anything from doctor offices and medical practices to restaurants to art galleries. Or the building can be torn down and the valuable lot used for something else entirely.
Of course, there are some bank branches in locations that have lost their competitive edge because of changing demographics and shopping patterns. Research must always be done to ensure that a piece of commercial real estate will be a worthy investment and meet your needs. One aspect of that research may be made easier by the fact that the income levels of those living and working in the area may be gauged by deposit information kept by the Federal Deposit Insurance Corp. (FDIC).
Even a high-growth market like Texas is not immune to the loss of bank branches so investors and developers here should at least be aware of this possible opportunity.