As U.S. banks rethink their footprints, they are not abandoning offices and branches—they are concentrating them. A new report from Cresa finds lenders are shifting toward fewer, higher-value locations while relying more on leasing to remain flexible.
The strategy reflects a balance between digital adoption and operational needs. Even as online banking reduces routine foot traffic, banks still rely on physical space for headquarters, regional hubs, regulatory functions and client-facing services. The result is a "quality over quantity" approach that prioritizes efficiency, talent attraction and adaptability over sheer scale.
"Banks are increasingly viewing real estate as an operational asset rather than merely an investment," the report said, pointing to growing use of leases and sale-leasebacks to free up capital while retaining control of critical locations.
Among the largest U.S. banks, more than half still own their headquarters, even as overall leasing activity has declined 9.1% since the pandemic. These institutions—dominated by five money-center banks—continue to anchor large urban portfolios but are also expanding regional hubs in faster-growing Sunbelt markets.
Tier one consists of the five money center banks with assets of over $600 billion. The group consists of JP Morgan Chase, Bank of America Corp., Citigroup, Inc., Wells Fargo and U.S. Bankcorp (USB). These banks account for almost 70% of all office space owned or leased.
Their real estate portfolios typically include large headquarters, trading floors and important office hubs in gateway markets. They are generally more urban and multi-market and tend to own their headquarters buildings. However, Wells Fargo and USB respectively lease their HQs in San Francisco and Minneapolis.
The average size of Tier one HQs is 1.42 million square feet, but ranges from 2.67 million for Citigroup in New York to 440,000 for USB. JP Morgan's new 60-story HQ is also in New York. Bank of America is in Charlotte, NC – a city the report said is often recognized as the nation's second-largest banking center after New York, having "attracted substantial banking operations and financial services firms" due to various strategic advantages.
The report noted that JPMorgan and Citigroup are among several large banks expanding regional hubs in Texas and the Sun Belt.
On average, Tier one banks hold about $116,000 in assets for every square foot of space – a metric that indicates how efficiently banks are managing their real estate assets – but there is a range from $70,000 to $236,300. Typically, offices occupy about 26,000 square feet. Banks with a high percentage of retail customers generally require more locations, which are typically leased.
"Tier 1 banks are shifting towards a quality-over-quantity approach, influenced by digital adoption and a focus on cost efficiency," the report noted.
The nation has seven Tier two banks, with assets ranging from $200 billion to $600 billion. These Super Regional banks have national or multi-regional footprints with centralized operations, usually with large urban HQs and several regional office hubs, including suburban or secondary market office space.
Tier two banks often have a mix of owned campuses and leased offices. The average HQ size is 350,000 square feet, with a range of 50,000 to 780,000 square feet. Five own their HQs and two lease them. Each is located in a different city in the east, including one, in Charlotte, which belongs to Truist Financial. On average, all the HQ owners manage $83,000 in assets for every square foot of office space.
Ownership rates among Tier two banks range from 31.6% to 59.3%. Owning offers cost stability and the opportunity for financial returns, while leasing enables flexibility. Tier two banks have been closing underperforming or redundant branches, but have been selective rather than aggressive. Many are selling their owned branches and leasing them back to free up capital for reinvestment.
Tier three banks are large regional players with assets ranging from $50 billion to $200 billion. They typically serve defined geographic regions, with smaller office portfolios in headquarters cities and regional markets, often in a campus environment. They own $69,800 in assets per square foot of office space, with a wide range.
The average size of Tier 3 bank offices is 18,900 square feet, but varies according to their business models, geographic reach and regional approaches. Those that cover more territory may have multiple regional headquarters or large corporate campuses.
Mergers and acquisitions may also have enlarged their office portfolios, creating overlapping service areas. Tier 3s typically lease a larger proportion of their office space compared to Tier 1, distributed between central business districts, urban areas and suburbs, which creates more flexibility in entering or leaving markets. They are more likely to retain traditional office formats due to limited resources.
As large U.S. banks currently shrink, redesign or reposition their retail branch holdings to focus on strategic locations and customer service, they continue to invest in them, the report noted. Many are also creating advisory centers that prioritize financial guidance over transaction processing.
There is also a flight to quality. However, the diminishing supply of Class A office space has led many banks to renew their leases rather than relocate. Since the pandemic, banks have signed fewer leases on average compared to other office occupiers, the report found. Fewer square feet have been leased, but lease sizes have increased slightly. Buildings with more amenities are preferred.
The uncertain prospects for employment in the banking industry caused by automation are another challenge.
"Occupiers who are well-prepared and adaptable, with the ability to scale operations up or down, will be better positioned to adjust to these upcoming changes," the report commented.
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