HOME  |  ABOUT  |  NET LEASE 101  |  CONTACT  |  SUBSCRIBE



7-Eleven
Advance Auto Parts
Affordable Dentures
ALDI
Applebee's
Arby's
Ashley Furniture
AutoZone
Bank of America
BankUnited
BB&T Bank
Best Buy
Bojangles'
Burger King
Chase Bank
Chick-fil-A
Chipotle
Circle K
Cracker Barrel
CVS
Dairy Queen
DaVita Dialysis
Dollar General
Dollar Tree
Dunkin' Donuts
Family Dollar
FedEx
Fred's Super Dollar
Fresenius Medical Care
Hardee's
Hobby Lobby
IHOP
Kohl's
Mattress Firm
McDonald's
Napa Auto Parts
O'Reilly Auto Parts
Panera Bread
PDQ
Pep Boys Auto
PNC Bank
Red Lobster
Rite Aid
Sheetz
Shell Oil
Sherwin-Williams
Starbucks
SunTrust
Taco Bell
TD Bank
Tractor Supply Co.
Verizon
Walgreens
Walmart
Wawa
Wegmans
Wendy's
  Starbucks


Average Property & Lease

Average Sale Price$1,917,543
CAP Rate (12mo avg)5.30%
NOI$101,490
$/Square Foot$1,000
Building Size1,500 - 2,000 sf
Lot Size0.5 - 1.0 acres
Lease Term10 +/- Years
Escalations10% every 5 years
CREDIT RATING
A-
S&P
A2
Moody's
view credit rating chart
view calkain.com property listings
Net Lease Advisor Overview

From a net lease prospective, it is important to recognize that Starbucks' initial growth and market dominance can be contributed to Starbucks ability to find great real estate locations. As others have pointed out, the Starbucks concept and success is driven as much by real estate as it is by coffee and the Starbucks experience. As a result, Starbucks has not only become the premier retailer of specialty coffee, but Starbucks' retail locations have also become popular net lease investments.

Starbucks typically operates under a 10 or 20-year net lease (varies between NN and NNN) with rental increases every five years. With almost 12,000 locations in the US, Starbucks locations can be found in both urban and suburban locations, and their locations take advantage of other traffic generators, typically being positioned on the commuting-side of traffic patterns. The average Starbucks store size varies depending on urban versus suburban location, but the newer free-standing locations range from 1,900 - 2,100 SF situated on 0.50 - 1.00+/- of land. The prototypical store model offers a drive-thru window and the configuration is adaptable to a variety of alternative uses.

The combination of a strong brand, stable financials, and premier locations makes Starbucks an appealing option for net lease investors.

Pros

Cons

  • National investment grade tenant
  • Located in high traffic suburban retail areas and increasingly more common and more preferable urban hub locations
  • Store configuration adaptable to a variety of alternative uses
  • Some are NN leases, holding the landlord responsible for at least roof and structure
  • Uncertainty of future Starbucks contraction
  • Right to cancel option in the lease
Tenant Description

Starbucks opened in 1971, a single store in Seattle's historic Pike Place Market and grew into a global public company with 24,000 retail stores in 70 countries.

Starbucks sells handcrafted coffee, tea and other beverages and a variety of fresh food items, including snack offerings, through company-operated stores. They also sell a variety of coffee and tea products and license their trademarks through other channels such as licensed stores, grocery and foodservice accounts. In addition to their flagship Starbucks Coffee brand, they also sell goods and services under the following brands: Teavana, Tazo, Seattle's Best Coffee, Evolution Fresh, La Boulange and Ethos.

Starbucks has 8,671 company-operated stores and 6,132 licensed stores across the country. During 2015, Starbucks opened 617 new stores were located in America. For 2016, the company plans to open 1,800 new stores and approximately 700 will be in the Americas.

Starbucks recent recognition includes, "Most Admired Companies in America" by Fortune from 2003-2015 and "World's Most Ethical Companies," by Ethisphere from 2007-2015.


STARBUCKS TREND
CAP Rate

2015 avg: 5.54%

2016 avg: 5.45%

RECENT SALES

Owasso, OK

$1,600,000 | 5.00%

Mount Pleasant, SC

$1,474,509 | 5.10%

MORE INFO
www.starbucks.com
Google Finance: SBUX
Google News: SBUX