Tuesday, April 7th, 2020 April7th2020

Sell for More News: The Most Likely Reuse Options for Closed Bank Branches

Published on April 7th, 2020

Sell for More News is a weekly blog series with interesting information from the world of commercial real estate.


Banks continue to shutdown branches across the country, but investors see creative reuse opportunities for these locations. The typical closed branch encompasses 8,000 SF to 14,000 SF of space…with some branches reaching up to 35,000 SF.

This is where creative reuse comes into play.  Take a 25,000 SF outparcel building, for example.  You have to match a user with the space.  Larger retailers are under pressure and there is limited growth in that sector.  A typical fast-food restaurant needs between 1,000 SF  and 3,000 SF.  Fast casual restaurants can occupy between 2,000 SF to 4,500 SF.  So it becomes a challenge to lease or sell that space.

A plan to divide the space for multiple users may be necessary.  Or an office user may be a fit.

An existing branch bank tends to have a certain footprint that is mostly geared to an office use.  For example, having a branch turn into a financial services office for an insurance company is an easy fit.  As you move into other uses like retail or restaurants or health clinics…it requires a complete rebuild of the space.

The costs to repurpose a branch can be significant.  That said, great locations will garner interest from investors willing to adapt the property into something new.

In 2019, 19% of closed branches changed use to fast casual restaurants.  17% changed their use to health clinics.  Surprisingly, only 7% of closed bank facilities were occupied by other financial institutions.

A fast-food restaurant operator may want to take over a bank branch because of their high visibility and infrastructure.  Also, most branches already have space dedicated to drive-throughs and receiving zoning for this type of layout can be difficult to get.

Well-positioned suburban spaces, in areas with stable or growing demographics, can often be repurposed by another bank or financial institution because they have similar office-oriented space requirements.

The average time to sell a vacated branch is nine and a half months…while the average time to sublease is slightly over a year.  Outparcels and endcaps with high visibility and quality signage are often in high demand. In-line spaces, in contrast, can be more difficult to fill and are more commonly repurposed to other uses such as restaurants, convenience stores or clinics.

Visibility is key. Parking in suburban locations is also paramount.  Urban bank branches situated in easy-to-access locations will probably stay in use despite the size of the facility being too large by today’s standards and branch functions turning more digital.  But branches that are lacking in visibility, access or demographics may struggle to find a reuse plan and remain vacant for a considerable length of time.

This is an important topic because banks continue to close branches across the country with no end in sight.  Approx.  1,700 branches closed in 2019.


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About Beau Beach, MBA CCIM

Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee and South Florida markets.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau can be reached at 800-721-3287, click to schedule a call or Beau@BeachwoodSells.com