Here’s how the closing of Starbucks stores is affecting home values across the U.S.

Starbucks, a staple in so many communities, is closing hundreds of locations across the U.S. and no neighborhood is immune to the cuts — with both suburban and metropolitan stores on the chopping block.

The coffee giant says the plan is to shut down stores that are financially underperforming or unable to provide the in-store experience customers have come to expect.

“During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Brian Niccol, Starbucks chairman and chief executive officer, said in a recent press release.

Starbucks has traditionally been located in bustling communities.

And with the price of a grande latte close to $6 at some locations, one can expect a Starbucks store in middle- to upper-middle-class neighborhoods.

Todd Drowlette, a real estate expert who once served as the youngest exclusive broker for Starbucks scouting new locations and who now represents a large Dunkin’ Donuts franchisee in New York, agrees.

“People consider a neighborhood’s total package. Having amenities in close distance adds to the desirability. Everyone wants convenience today,” Drowlette tells Realtor.com®.

“Whole Foods still brings with the brand a feeling of an upscale community because people know the type of neighborhoods they are located in.”

What happens to property values when retailers close?

The departure of a major brand like Starbucks can cause ripple effects in the local real estate market.

The opening of a new Starbucks has long been associated with the “Starbucks effect”—a term used to describe how the presence of the brand often signals a neighborhood’s rising affluence and desirability.

“The presence of the cafe could then add to the area’s appeal, along with the other factors that convinced the company to open the location to begin with,” explains Hannah Jones, senior economic research analyst at Realtor.com.

“Put differently, Starbucks doesn’t cause home values to rise on its own; instead, it tends to open stores in neighborhoods where other factors, such as economic growth, rising demand, and increasing property values, are already at play.”

Jones says closures can reverse this perception, signaling a decline in foot traffic or consumer demand.

Drowlette adds that while one closure might not do lasting damage, multiple shutdowns could start a negative trend.

“If it begins the downward spiral with two or more, it will hurt surrounding property values,” he says.

Dowlette also notes that Starbucks no longer carries the exclusivity it once did.

“Starbucks 10 years ago brought a certain exclusivity to a neighborhood. They have lost that luster to a large degree. A Starbucks coming doesn’t change a neighborhood, but store closings can make people feel like their neighborhood is less desirable or not affluent enough to support the store,” he says.

A 2019 study by Emerald Insight examined the impact of Starbucks on local real estate markets in Manhattan, where the researchers found a statistically significant positive correlation between Starbucks locations and nearby office rents.

Using detailed multiyear data—including job density, WalkScore, transit accessibility, and Starbucks branding—the researchers discovered that commercial rents rose near Starbucks locations. However, the connection between Starbucks and residential rents was weak, with only a modest 2.3% increase observed, and that at just a 10% level of statistical significance.

This suggests that while Starbucks may elevate the appeal of a commercial corridor, it doesn’t necessarily drive up residential property values directly. Instead, its presence may reflect and reinforce broader economic and demographic trends already underway.

Starbucks closures may not immediately tank property values, but they can signal weakening demand, reduced walkability, and shifting neighborhood dynamics—especially when clustered in key commercial corridors.

Where are Starbucks stores closing?

Metros like Philadelphia, Northern Virginia, Baltimore, and Washington, DC, have already seen a wave of Starbucks closures. In Philadelphia alone, five stores recently closed, sparking protests led by current and former employees calling for stronger worker protections and union contracts.

“Many of the closures listed are in city cores or densely built commercial corridors,” says Jones. “That matches reporting that Starbucks is shutting ‘some high-profile urban locations’ as foot traffic in central business districts remains depressed.”

In Northern Virginia, at least 16 stores across the DMV (District of Columbia, Maryland, Virginia) area—including nine in Washington, DC—were confirmed to be closing, according to WUSA9. Employees expressed confusion and uncertainty, with one worker at the L Street location saying she was told her chances of being laid off were “50-50.”

Some learned about their job status through the Starbucks app, local news, or directly from managers, while others waited for official updates after their stores closed.

In Baltimore, at least six stores have been listed for closure. Other states affected include California, Texas, and Oregon.

These store closings follow a confluence of challenges: declining in-store sales, changing consumer habits favoring drive-thru concepts, intensified competition, the shifting demographics of post-pandemic urban life, and backlash from activists.

“In other words: Locations that may have been viable when downtown activity was higher (office workers, commuters, shoppers) are now more vulnerable if that traffic hasn’t rebounded fully,” Jones adds.

In the statement released last week, the CEO added that Starbucks has opened “numerous coffeehouses over the past year” and the “overall company-operated count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures.”

Despite the closures, Niccol emphasized Starbucks’ continued commitment to growth, noting the company expects to end the fiscal year with nearly 18,300 stores across the U.S. and Canada.

Over the next year, Starbucks plans to modernize over 1,000 locations with updated, warmer designs.