New York rent is so high that Starbucks has started closing some locations
REUTERS/Eric Thayer
Starbucks is looking to close some of its pricy, large locations, according to the Commercial Observer.
The brand has nine stores for every square mile in Manhattan according to the Wall Street Journal.
Last year marked 20 years since Starbucks came to New York, which means the leases on some its original city locations are up for renewal.
And, increasingly, the chain is seeing these coveted corner locations it had as just not worth the extra expense.
Commercial Observer reports that a Starbucks at the corner of Fifth Avenue and West 33rd Street was shuttered after they declined to release the space for $1 million a year.
Another shop near Lincoln Center is also on the market, and other locations are rumored to close, like the one at Union Square North (Broadway and 17th Street), after its rent doubled from $325 a square foot they currently pay to the $650 a square foot the landlord is asking now.
This comes as no surprise, as retail rents have been on the rise for a while now. In Manhattan alone rents rose 20%, Commercial Observer reported in 2014.
Of course, Eater notes that, if Starbucks wanted to, they could pay the exorbitantly expensive leases. Revenues grew more than 10 percent in the fourth quarter of 2014 to a record $4.2 billion, according to Commercial Observer.
But they just aren't worth it as the brand is strong enough to to lure customers into Manhattan's less-busy side streets to get their Carmel Frappuccinos and Venti Chai Lattes.
"In today's world of rising rents, especially on the high-profile corridors, likely Starbucks knows they can still be successful in smaller space and/or just off the main avenues," retail specialist Robin Abrams of Lansco told Commercial Observer.
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- From heart health to detoxification: 10 reasons to eat beetroot
- Why did a NASA spacecraft suddenly start talking gibberish after more than 45 years of operation? What fixed it?
- ICICI Bank shares climb nearly 5% after Q4 earnings; mcap soars by ₹36,555.4 crore
- Markets rebound sharply on buying in bank stocks firm global trends
- Bengaluru's rental income highest in Q1-2024, Mumbai next: Anarock report
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market