Chase Likely To Close Most Local WaMu Sites

CHICAGO-While JPMorgan Chase officials said they have not yet decided which of Washington Mutual’s branches will be closed and when, market experts say they expect widespread closures, leading to increased vacancy and subleasing in the Chicago market within the next year. Speculation on closures and their impact on the market have come on the heels of WaMu’s sale late to Chase for $1.9 billion. WaMu’s collapse is said to be one of the largest bank failures in US history.

In taking over WaMu, Chase has said it plans to close less than 10% of branches in the combined network. “There will be some closures in markets where there’s overlap of WaMu and Chase branches, so there will be some in Chicago,” a Chase spokesman based in Chicago tells GlobeSt.com. “We just don’t know how many and where and when yet.”

However, analysts say the number of closures will likely be significantly higher in the Chicago region, which is rich in overlap between the two company’s branches. “The rumor on the street is that, in the case of WaMu, about 80% of its branches will be closed. You look at the geographic coverage, and the key is overlap,” says Dirk Riekse, an SVP with Grubb & Ellis who frequently advises banks in the Chicago market. “Chase’s business model for bank branches was either long-term leases or ownership driving their locations. WaMu was located more in strip centers and short-term leases. What they’ll probably do, because they’re short-term leases, is subleases or early buyouts.”