Last year marked 20 years since Starbucks came to New York, which means the leases on some its original city locations are up for renewal.
And, increasingly, the chain is seeing these coveted corner locations it had as just not worth the extra expense.
Commercial Observer reports that a Starbucks at the corner of Fifth Avenue and West 33rd Street was shuttered after they declined to release the space for $1 million a year.
Another shop near Lincoln Center is also on the market, and other locations are rumored to close, like the one at Union Square North (Broadway and 17th Street), after its rent doubled from $325 a square foot they currently pay to the $650 a square foot the landlord is asking now.
This comes as no surprise, as retail rents have been on the rise for a while now. In Manhattan alone rents rose 20%, Commercial Observer reported in 2014.
Of course, Eater notes that, if Starbucks wanted to, they could pay the exorbitantly expensive leases. Revenues grew more than 10 percent in the fourth quarter of 2014 to a record $4.2 billion, according to Commercial Observer.
But they just aren’t worth it as the brand is strong enough to to lure customers into Manhattan’s less-busy side streets to get their Carmel Frappuccinos and Venti Chai Lattes.
“In today’s world of rising rents, especially on the high-profile corridors, likely Starbucks knows they can still be successful in smaller space and/or just off the main avenues,” retail specialist Robin Abrams of Lansco told Commercial Observer.
This article originally appeared in Business Insider. Copyright 2015.
