Rock & Roll and Your HQ Strategy

Stop Making Sense – at least to me – is a great album by the Talking Heads recorded in 1984. Today – nearly forty years after its release – the title seems more timely than ever.
Consider: Less than two years ago, COVID looked like it would crater equity and capital markets for years to come. Instead, while the pandemic lives on, those markets have climbed to record highs. After a huge initial surge in unemployment, businesses are now struggling to fill millions of open jobs. And the bottle-necked international supply chain, combined with inflation pressure, has consumers buying – and not buying – at the same time for different reasons.
In other words, Stop Making Sense.
For credit unions, all of this and more makes it tremendously challenging to determine with confidence whether to pursue change or stand pat – particularly when it comes to one of their most valuable/costly assets: Its headquarters. But, if you understand the pros and cons, this might be the perfect time to turn your long-time owned HQ asset into a catalyst for growth and a tool for staff recruitment and retention.
Here are three options to consider:
Option #1: Sell, Lease and Move
At the pandemic’s outset, it was highly anticipated that the value of office buildings would implode. But lo and behold – again, Stop Making Sense – they haven’t. However, landlords are under pressure to reduce rates, increase incentives and relax deal terms. In other words, COVID-19 has turned a decade-long landlord’s market into a renter’s market.
For credit unions, this provides the opportunity to sell their HQ’s and turn that on-paper equity into liquidity to lease potentially better space while simultaneously accomplishing the following:
- Applying that treasure chest of cash toward expanding their portfolios.
- Enhancing internal operating systems
- Providing additional products to members
- Adding to diverse investments which provide a profitable return.
The net result is lower cost and greater flexibility, along with a strategic location to ideally retain and recruit top talent. And again, access to liquidity to grow in new and sustainable ways.
Option #2: Sell and Lease Back
This option is growing more and more popular to CU’s – especially for those that still find their HQ space to be highly functional for several more years.
In addition to unlocking the equity, the big benefit here is having additional assets for investment without the cost or disruption of physically moving. This is a perfect example of “managing your real estate rather than your real estate managing you.”
As in the case of Option #1, the credit union sells their assets to a new owner while remaining in the exact same location. But instead of a mortgage, property tax bill and never-ending maintenance and capital costs, the credit union pays for rent and – depending on the lease terms – possibly utilities. That’s it.
In short, a Sell/Leaseback strategy delivers liquidity and flexibility without any more major capital costs or operational disruption. And when the time is right to make a move and purchase another asset or sign a great lease, you’re in control.
Option #3: Stay and Right Size
Driven by the pandemic, this option is playing out in real time from coast-to-coast. In some cases, HQ’s are largely empty with the majority of staff working from home. In other cases, it’s business as usual. But in many credit unions, the “hybrid model” is in place with some staff working from home while others have returned to the office.
For a majority of CU’s, the hybrid model may well be the new normal. How long is unknown. That question is leaving managers to read the tea leaves on how and whether to “right size” their space so that employees that are in the office don’t feel like stragglers long after the party has ended.
One example of right sizing is determining how to strategically manage “shifts.” i.e., allowing staff to come in as they please, or requiring their attendance in synergistic groups on designated days.
A model that seems to be gaining traction is organizing teams in two-day rather than random or three-day shifts. In doing so, each team has the benefit of working in proximity twice each week, with an optional “floating day.” In the three-day model, the math doesn’t work effectively. In a random model, who knows?
While there is no significant cash flow benefit to this option, the model may allow a CU to maintain an owned-asset that it likes while optimizing its space for the retention and recruitment of a prized attribute that is becoming harder and harder to find, retain and incentivize: Highly qualified people.
Change is never easy, particularly these days. But as the past two years have proven, opportunity can be often be found when and where we least expect it. But it can only happen if we are open to looking for it. And that is, in the words of Talking Heads lead singer and songwriter David Byrne, “the same as it ever was.”

Corey A. Waite is a leading commercial real estate advisor to the financial services industry. As Founder and CEO of Rubicon Concierge Real Estate Services, Corey works directly with senior executives coast-to-coast to deliver strategic plans and transactional services focused on optimizing the needs of employees, clients and members.
Meeting of the Minds: The 2023 MAXX GoWest Conference
Connor Riley and I recently returned from Spokane, Washington and the excellent MAXX GoWest Credit Union Conference. GoWest is a newer organization comprised of more than 300 CU’s serving 16.5...
Intelligence is not Artificial
I’ve always liked technology. I spent over a decade traveling to Silicon Valley to work with high-growth technology companies. I continue to read about it. I spend plenty on it for my family’s...
Marketing Matters
Even though it’s not my core competency, I’ve always had a strong interest in the area of marketing. As both a business owner -- and on behalf of the clients’ we serve -- I find the art and science...
CDFI’s – The Magical Map to Success
When it comes to the credit union industry, I never cease to be inspired by the many people I meet who are committed to making their organizations and communities stronger and more sustaining.
Brand Confidence Begins at the Branch
In a recent article Credit Union Times article entitled, “How Credit Unions Should Think about Improving the Member Experience,” guest contributor Joseariel Gomez made some excellent points...
CUSO’s, Capital and the Culture of Credit Unions
In addition to enhancing income and capital, a Sale/Leaseback transaction provides a “win-win” by enabling CUSO investors to achieve certain tax benefits that are unavailable to credit unions.
Still Banking on Branches
Silicon Valley Bank (and others), inflation, fed interest rates and future job uncertainty are all fueling concerns about and within the banking industry. Yet, in the face of all this uncertainty, credit unions and community banks are still expanding their branch networks. Why? And are they going about it in the right way?
Credit Union Real Estate Decisions: Branching Better
Despite all the gloomy pandemic (and post-pandemic) predictions, credit unions from coast-to-coast are bullish on branches. Not long ago, those who think they know, began penning their collective...
Your People, Your Workspace, Your Future
Nearly every firm we know has — or is in the process — of evolving its workplaces in order to recruit and retain key talent and grow their business. See what one of the world’s leading consulting firms has to say on the matter.
Credit Union Real Estate Decisions: Listen, Read, Absorb
A lot of smart people go deep to deliver powerful information and insights that can benefit your business. And the best leaders are those who carve out the time to find, consider and, if and when appropriate, employ what they’ve learned.
Flexibility as Fact
For all its angst, the pandemic has been a catalyst for change throughout the credit union industry. CU’s of all size are embracing innovation and re-considering everything … especially when it comes to design and purpose of their branches.
Credit Union Real Estate Decisions: The Same But Different
While considering growth into new markets, credit unions should keep two things in mind: One, even nearby, expansion costs can differ wildly. And two, rigidity in expansion planning – while prudent – can also be costly.