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J. Chie, Esquire

Our law firm provides legal work for real estate closings for over 30 years… What distinguishes Chicago Commercial Appraisal Group from other appraisers is the level of thoroughness and details.

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Gary is a hands-on professional always willing to pick up the phone and work with you... His appraisal firm produces one of the best real estate forecasting reports in the state. I highly recommend his work and his opinion is highly recognized by governmental agencies.

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As an attorney, we deal with many appraisal reports used in tax appraisals. Gary's work has proven successful for our clients and I do not hesitate recommending him for tax assessment appeal appraisals.

C. Noone, property owner

I needed an appraisal for settling an estate. Mr. Peterson was very professional, punctual and helpful with the process. I received my report ina timely manner. I would certainly recommend this company, as well as use their services in the future.

J. Tsiaousis

Gary is one of the top commercial appraisers in Chicago. Every time I have a client in need of a commercial appraiser I refer all work to him without hesitation.


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Bank Branch Demand Continues Its Decline

Periodically, we see news stories about this or that bank cutting back on its branches. The enormity of the demand decline, however, is fundamentally changing the economics of these facilities.   According to a Crain’s Chicago Business January 12, 2022 article, there are, as of June 30, 2021, 2,074 bank branches in the six-county area.  In the past five years, the number of bank locations have fallen by almost 16% or approximately 400 branches.

 

We reported in the past that the footprint of new bank branches is also continuing to decline.  A recent JLL 2020 Branch Banking Report reported that the best modern branches are designed to a size of 2,000 to 3,500 square feet which would support a full-service operation.  This compares to 5,000 to 7,000 square foot branches of the past.  The report also indicates that 76% of all branches that are more than 15 years old increases the likelihood of obsolete layouts. Flexibility in design is increasingly more critical in bank design. Future-proofing new branches against evolving technology is necessary to keep them from becoming obsolete in this rapidly changing environment.

 

Bank values are being hurt because another bank would be the most likely to pay top dollar for a facility on the market.  The JLL report found only 7.5% of closed facilities were used by other financial institutions.  Those facilities were in well-located suburban areas with stable or growing demographics. Alternative uses include 14% of bank branches sold to convenience stores, 12% to dollar stores, 9.5% to boutique fitness facilities, 5.5% to temporary retail and 15% for other general uses.

 

When a bank facility shifts to an alternate use, more conversion costs are required which are deducted from the value of the facility.  Alternate uses are now the norm instead of the exception.  Many high-priced bank branch sales probably reflect legacy leases with custom buildouts at premium rents.  Fee simple bank branches with no leases in place won’t have the same advantage.