Starbucks is set to close hundreds of coffee shops across the U.S., and this shake-up could affect neighborhood dynamics—and possibly housing prices, Realtor.com reports via UNN.
The company plans to shut locations that aren’t financially efficient or can’t meet the service standards customers expect.
“As we’ve reviewed, we’ve identified stores where we cannot create the physical environment our customers and partners expect, or where we don’t see a path to achieving financial results, and those stores will be closed,” said Brian Niccol, Starbucks’ CEO and chairman, in a press release.
Neighborhood Impact
Starbucks locations are often found in bustling areas. With prices for a grande latte approaching $6 in some places, the brand is mostly in middle- and upper-middle-class neighborhoods.
Todd Droulette, a real estate expert and former Starbucks broker for new locations, says coffee shops influence a neighborhood’s appeal.
“People evaluate the full range of services in a neighborhood. Proximity to infrastructure increases attractiveness. Today, everyone wants convenience,” he explained.
The closure of a major brand like Starbucks can trigger a chain reaction in the local real estate market.
The Starbucks Effect
Opening a new Starbucks has long been associated with the “Starbucks effect”—the idea that a store signals growth, prosperity, and desirability of an area.
Hannah Jones, a senior economic research analyst, clarifies: “Starbucks doesn’t increase housing values on its own. The company tends to open stores where economic growth, rising demand, and increasing property values are already happening.”
She notes that closures could change this perception, signaling reduced foot traffic or consumer demand.
Droulette adds that while one closure might not cause lasting harm, multiple closures could spark a negative trend. “If it starts a downward spiral of two or more, it will negatively affect the value of surrounding real estate,” he said.
What Studies Show
A 2019 Emerald Insight study looked at Starbucks’ impact on Manhattan real estate.
Researchers found a strong positive correlation between Starbucks locations and commercial rents nearby.
Residential rents, however, only saw a modest 2.3% increase, with limited statistical significance.
The study suggests Starbucks can boost the appeal of commercial areas but doesn’t directly drive residential property values. Its presence often reflects broader economic trends already in motion.
While Starbucks closures might not immediately lower property values, they can signal declining demand, less pedestrian traffic, and changing neighborhood dynamics—especially along key commercial corridors.
Author Profile
-
The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
Latest Posts
BlogDecember 15, 2025Houston Real Estate 2026: Growth and Hotspots Ahead
BlogDecember 3, 2025Why Houston Real Estate Investing Is Surging in 2026
BlogNovember 29, 2025Real Estate Market Insights: Why Every Call Matters
PerspectiveNovember 20, 2025Things to do in New York without real estate agents