Starbucks Is Closing 250 Stores. Read Your Lease.

Starbucks Is Closing 250 Stores. Read Your Lease.

Starbucks is closing approximately 250 stores across North America. When the list came out, we wanted to know something that wasn't being widely reported:

How much lease term is Starbucks actually walking away from?

So we took the September closure list and ran it through DealGround.

We identified 58 properties where DealGround had previously captured an Offering Memorandum, including 51 single-tenant Starbucks properties and seven multi-tenant centers. Of the single-tenant properties, 50 had enough information to determine the remaining lease term.

Here is what we found:

Forty-eight of the 50 properties, or 96%, have more than five years remaining on their leases.

Let that sink in.

These aren't primarily old Starbucks locations reaching the end of their lease terms. Several are relatively new drive-through stores built in 2024 and 2025 and subsequently sold to investors with new long-term Starbucks leases.

Some have an extraordinary amount of term remaining. Kearny Mesa in San Diego has approximately 17 years left. Tallahassee has 16.6 years. St. Louis has 14.1 years. Darlington, South Carolina has 14 years. San Bernardino has 13.8 years.

For years, investors have paid aggressive cap rates for newly constructed Starbucks properties because they believed they were buying long-term corporate Starbucks income. The DealGround data shows why investors need to look beyond the number of years of “guaranteed” lease term.

A ten-year lease doesn't necessarily mean ten years of operation or income. More importantly, depending on the lease language, it may not mean ten years of economic protection either.

I've reviewed leases for two Starbucks stores included in this closure round. One limits Starbucks' exposure for lost Base Rent and Annual Additional Rent to two years. The other limits it to four.

That becomes awfully important when DealGround is showing stores closing with five, eight, ten, and even 17 years remaining.

It is also why this data matters to brokers.

Starbucks is dealing with approximately 250 closures. Each individual landlord is dealing with one. Starbucks knows what is in its other leases, what it is offering other landlords, and what settlements are being accepted. The individual owner doesn't have that visibility.

DealGround gives us a head start.

We can see the original Offering Memorandums, remaining lease terms, rents, transaction history, current Starbucks offerings, and ownership information across affected properties. Instead of looking at one Starbucks in isolation, we can begin looking at the closure program as a portfolio.

Information is leverage.

If you're advising one of these landlords, you should know everything you can before Starbucks calls. Understand the lease. Understand the remaining obligation. Understand the underlying real estate. Know the replacement rent. Know the replacement tenants.

And most importantly, understand your leverage.

That's exactly why we built DealGround.

To get more information like this and read the full article, sign up for DealGround or schedule a demo.

Happy hunting. LFG!
The DealGround Team