Retail Real Estate Is Tightening — Here’s What That Means for Your Next Branch

Retail real estate is getting crowded again—and if your credit union or community bank is planning to grow, that has big implications.

Recent national data shows that retailers leased over 4.7 million square feet of space in the third quarter of 2025, bouncing back after a slower start to the year. But here’s the catch: very few new retail buildings are being developed. That means fewer available spaces, rising prices, and stiffer competition for the best locations.

In short? Demand is up, and availability is down.

What’s Driving This Shift?

Prime spots are disappearing fast. Retail centers with strong visibility and consistent foot traffic—especially those near grocery stores and other daily-use anchors—are filling up quickly. That leaves fewer turn-key spaces for new branches.

Better data just became available. As of November, ShoppingCenters.com refreshed its database of nearly 17,400 U.S. retail centers and over 360,000 tenant locations. It includes insights on anchor stores, traffic patterns, and neighborhood demographics—all critical factors for planning your next move.

This data gives you a much clearer picture of which areas are heating up—and where your next branch can have the most impact.

What This Means for Your Growth Plan

If expanding your branch network is on the table for the next 12 to 24 months, you’ll need to think strategically. With fewer ready-to-go spaces available, the most successful credit unions and community banks are adjusting their approach:

• Looking off-market. Some of the best sites never make it to the open market. In fact, more than 70% of the properties LEVEL5 acquires for clients are secured off-market—before competitors even know they’re available.
• Repurposing existing spaces. Former pharmacies, restaurants, or bank branches can often be renovated more quickly—and more cost-effectively—than new builds.
• Letting data lead. By understanding tenant trends and foot traffic, you can spot underserved areas and place branches or ITMs where demand is rising—before the window closes.

Now Is the Time to Act

Right now, the market is rewarding institutions that move with clarity and speed. With supply tightening, sitting still could mean missing out—while your competitors secure the locations that set them up for long-term growth.

But this is also a moment of opportunity. Better data and smarter strategies make it possible to secure the right sites, at the right time, and make growth predictable—not just possible. At LEVEL5, we help credit unions and community banks make these moves with confidence—from identifying the best locations to designing and building branches that fit your brand and market.

Want to talk through your growth strategy? Start the conversation at level5.com/launch.