Yesterday, Dealbreaker reported on the changing retail banking trends and mentioned the huge impact it will have on retail real estate over the next decade. As more and more "millennials" (and everyone else under 50) are able to do all of their banking with their phones and computers, the need for a physical retail bank continues to plummet. New York City has already seen a 45% decrease in bank branches, apparently.
Speaking from experience, I haven't visited an actual bank branch in multiple years. My credit union is states away and I do all of my banking online.
Those of you who deal more in retail real estate can elaborate more I'm sure, but there are definitely going to be some shakeups over the next ten years, if it even takes that long.
Source: http://dealbreaker.com/2015/06/millennials-to-wall-street-cute-bank-bra…
I feel like multifamily/single family is the only asset class that will last forever. Some day in the future people might be able to work from home and shop from home
You need industrial to store the goods though
I'm curious to see how this unfolds. I am part of the millennials and although I participate in online banking frequently, I still visit an actual branch at least once or twice a week.
I think part of retail (fast food) will always have a place. Though, with driverless cars coming it will be interesting to see how they remodel their drive-thrus.
Banking branches are still paying way over market for retail space, so they still see it as a profitable venture, at least for the foreseeable future.
That could fit the pattern still though. If a bank eventually reduces its retail foothold on a city by 90%, the 10% remaining becomes more valuable and they're still saving money even while paying top rent.
Why are they paying above market? Shouldn't they be paying below market due to their superior credit?
If I owned retail buildings in a CBD I'd rather have a Santander branch than a Quicky Food Mart and I'd give the bank branch a break on the rent if it ensured I don't end up with sh*tty tenant credit.
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