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ARE MAJOR BANK-BRANCH CLOSINGS ON THE HORIZON?

On the heels of the federal bailout of Washington Mutual and the latest big-bank merger between Wachovia and Wells Fargo, last week’s Quick Poll asked whether major bank-branch closings are on the horizon. An overwhelming 78% majority indicated “true.” Gene Berman, senior managing director of Marcus & Millichap in Fort Lauderdale, shares his thoughts with GlobeSt.com on the subject:

“It’s still too early to tell. WaMu was obviously a big blow, and the biggest concern over the financial bailout bill before Congress is solving liquidity and the ability to borrow. The bill raises the ceiling on insurable deposits so that there are no more runs on banks.

“Deals are getting done, but it’s more difficult to get a loan because the terms and conditions are not what they once were. Loan-to-value and debt-coverage ratios have changed even though interest rates are down, but if you have done all the right things and you have good credit, you can still get loans. It’s as if we’re going back to basics.

“There are times when certain assets will become available that would not be at other times. Well-located real estate is still in big demand and buyers are out there. Main-and-Main locations are very desirable and trading at a premium. What has taken the hit are secondary and tertiary locations.

“Bank branches are normally built by developers and leased by banks. Most of them are freestanding locations on corners of shopping centers, and there aren’t many alternatives to their use. Those branches in inline shopping centers should be easier to re-tenant, except for the presence of the safe.”

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