Closures of Starbucks Stores Worry U.S. Realtors

Starbucks — a fixture in many American communities — is closing hundreds of locations across the United States, affecting both suburban and urban areas.

Starbucks has traditionally chosen bustling, middle- to upper-middle-class neighborhoods for its stores — areas where a grande latte can cost nearly $6. (Photo: GoToVan Wikimedia Commons)

The coffee giant says the closures target underperforming stores, Teresa Mettela reported for Realtor.com.

“During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Starbucks Chairman and CEO Brian Niccol said.

Starbucks has traditionally chosen bustling, middle- to upper-middle-class neighborhoods for its stores — areas where a grande latte can cost nearly $6.

Todd Drowlette, a real estate expert who once served as Starbucks’ youngest exclusive broker and now represents a major Dunkin’ Donuts franchisee in New York, said the closures could affect neighborhood appeal.

“People consider a neighborhood’s total package. Having amenities nearby adds to the desirability. Everyone wants convenience today,” he told Realtor.com.

The opening of a new Starbucks has long been linked to the so-called “Starbucks effect” — the idea that the presence of the coffee chain signals rising affluence and boosts nearby property values.

“The presence of the café could then add to the area’s appeal, along with other factors that convinced the company to open the location to begin with,” said Hannah Jones, senior economic research analyst at Realtor.com.