Monday, May 18, 2009

Starbucks Continues to Shutter Stores

I neglected to post this when the news first hit, but for those of you that missed it, Starbucks, the once darling of the NNN world has announced another round of shutters. We wonder when the hemorrhaging will stop. Starbucks continues to make money, so we are not talking about a bankruptcy situation here. No, they are projected to Net over $300 million this year. They just got a little sloppy on site selection. The good news is most of these leases are for 10+ years, so Starbucks is legally obligated to pay the rent. The issue comes if your financing balloon is a lessor term than the lease contract and when the original commitment on the lease from Starbucks comes to an end. Investors should be interested in at least negotiating out of the lease with Starbucks, if they feel they can line up another tenant....easier said than done in this environment, I know.

Here is a piece from the Tampa Bay Business Journal about stores that will be affected in the Tampa Bay Area.

3 comments:

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