After 20 Years, Starbucks Is Feeling the Pressure of New York Rents

Starbucks just hit 20 years in NYC last year and now, as the leases for several of its flagship Manhattan locations run out, the coffee giant is struggling to hold on to some of those locations. Starbucks, as it turns out, is not immune to the skyrocketing rents plaguing so many of New York's restaurants and small businesses. A Starbucks at 33rd and 5th recently closed when a lease topped $1 million a year and the space that houses an outpost right near Lincoln Center is on the market, reports the Commercial Observer. At some shops, like the one on the north west corner of Union Square, the value of the rent has doubled since the shop opened from $325 a square foot to $650 a square foot.

The key difference between Starbucks and all the other businesses struggling to keep up with their rents is that the corporate giant could pay for that million dollar lease if it wanted to, but it doesn't think it's worth the effort. So no, Starbucks won't be leaving New York anytime soon, it will just turn to different types of shops. As the Commercial Observer points out, the brand strength of the company in 2015 will draw people slightly farther afield just to get their mocha-whip-no-foam-frappucinos. Slightly smaller locations are also an option. Plus, Starbucks is working on two new concepts for Manhattan, a to-go only express shop and reserve coffee/tasting room cafe like the one the company opened in Williamsburg in November.