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With the rise of online banking over the past decade, financial institutions have downsized their brick-and-mortar footprints, closing branches, leaving a trail of available real estate in their wake.
Wisconsin today has about 22%, or 519, fewer bank branches than it had in 2011, according to FDIC data. Over the same period across southeastern Wisconsin’s seven counties, total bank branches declined almost 24%, with 178 closures. Of the 96 bank branches that have disappeared from Milwaukee County in the past decade, 54 were in the city of Milwaukee.
Local data tracks higher than the national trend. A 2021 bank branching report by JLL shows bank branches across the U.S. have dropped 13% from 98,000 in 2010 to 85,050 in 2020; however, the rate of closures slowed last year due to the COVID-19 pandemic.
So, what’s become of the buildings that banks once occupied? Many aren’t vacant for long, local real estate industry experts say.
“Generally speaking, we see financial institutions and banks that typically have prime real estate, so it’s attractive (to a new buyer) a lot of times just based on the real estate and the value that is created based on the site,” said Tom Treder, principal – retail brokerage at Milwaukee-based Founders 3.
In some instances, former bank branch spaces are filled with similar office-type users, such as financial services, where minimal buildout is needed. Other adjacent uses could be clinics or retail-type businesses, such as the Verizon store that now occupies the former Bank Mutual space at Bayshore in Glendale.
Treder has worked with several clients who have purchased and converted vacant branch buildings to new uses, including a dental clinic. That project didn’t come without its costs.
“There are certainly some challenges to converting a bank just because there’s a lot of interior buildout. … First of all, there’s a safe. Those are costly and expensive to remove,” he said, adding that the price of prime real estate is steep on its own.
Completely demolishing and redeveloping the property is another common solution. That’s what happened to the former Hales Corners Westbury Bank branch, at 5480 S. 108th St., when it was replaced with a new-build Dunkin’ Donuts. A JP Morgan Chase location once occupied a portion of the North King Drive property in Milwaukee where Pete’s Fruit Market is currently located.
But for businesses that can reuse the building, there are significant advantages, said John Kardelis, senior vice president at Colliers International.
“Bank branches are well maintained. In smaller towns, villages, and cities, they are usually some of the nicest, most well-built buildings,” he said.
In the Village of Rochester in Racine County, a new coffee shop opened last month in a former Community State Bank office building. The Union Grove-based company in 2019 had been preparing to close its Rochester location when Jane and Bob Willard pitched the idea of what’s now DW Coffee.
“Our goal was not just to get the highest price for the building, but our goal was to pass on the building to somebody who could bring an asset to the community,” said Scott Huedepohl, president and CEO at Community State Bank.
The longtime Rochester residents purchased the building and renovated it over the past several months. Leslie Kinsey was recruited to own and operate the café, which sources its coffee from Lake Geneva Coffee Roastery.
An even larger bank branch redevelopment project is underway in Milwaukee, at the former Associated Bank branch on North 59th Street and West North Avenue. To the tune of an estimated $1.5 million, the building is being transformed into a 12-vendor food and retail hall, known as the North Avenue Market, slated to open next year.
Owner Chris Harris-Wimsatt said the concept was born out of a bucket list dream of running a coffee shop – and, since moving to Milwaukee’s Washington Heights neighborhood, one that would foster community for the surrounding area.
None of the sites Harris-Wimsatt toured had suited his community-focused vision, but then he found out Associated Bank was closing its North Avenue branch. His husband suggested the possibility, pointing out that it would be the only coffee shop in the area with a drive thru.
“We looked at it, and when I walked through the door, I was like, wow, this is more than a coffee shop because it’s over 10,000 square feet,” Harris-Wimsatt said. “That made me reflect on Milwaukee Public Market, Crossroads Collective, Sherman Phoenix and other food halls.”
The building had housed banks since it was constructed in the early 1950s. The project is designed to preserve some of that history as well as take advantage of the former bank’s interior features, he said.
A safe in the basement will be used as part of a speakeasy bar run by local bitters maker Bittercube, and the former bank’s main safe on the ground floor is being converted to a kitchen. A coveted feature among restaurant users today, the drive thru will be communal, allowing customers to pick up online orders from multiple vendors without stepping inside.
“We’re trying to take some of the components of what is provided to us and see how they fit for modern-day use,” said Harris-Wimsatt.