As Starbucks franchises continue to proliferate, the Seattle-based coffee shop is also becoming a source of increased value for residential real estate within a quarter-mile of its locations. A study conducted by the real estate research group Zillow found that homes in closer proximity to a Starbucks storefront increased in value by 96 percent between 1997 and 2013. In comparison, the value of all U.S. homes within the same time frame increased by 65 percent.
The successful company is believed to have a knack for finding locales with a thirst for its products. Employing teams of analytic experts and regional scouts, the chain has carved out a meticulous plan for sustainable growth. Perhaps not coincidentally, nearby neighborhoods are experiencing an increase in appreciation in real estate value. According to Zillow, Starbucks brings a certain cache that draws more development, and consequently more commerce, in a quarter-mile radius.
The effect on local communities and homeowners in the city of Boston may have reaped the most rewards from Starbucks’ due diligence and campaign to boost its brand. Using the same measuring stick of 17 years, home values in nearby areas went up 171 percent. Such numbers even surpassed the local favorite Dunkin Donuts, which also has been able to increase the fair market value of neighboring residences.
The company’s rapid expansion and its impact on local communities is sure to be of interest to anyone with a stake in an adjacent site where the development of land or residential real estate is contemplated. To avoid infractions and tangles over zoning laws, contract terms or title issues, legal counsel can be of assistance in reviewing the proposed terms of such a real estate transaction.
Source: CNN Money, “The ‘Starbucks effect’: Higher home prices”, Katie Lobosco, March 4, 2015