Commercial Real Estate Blog

Starbucks (NASDAQ: SBUX) announced that it is closing 600 stores in the United States. In addition they announced that they have revised their plans to open less than 200 stores in the United States in 2009. The announcement comes after several years of rapid expansion; Starbucks announced that it planned 1500 new stores in 2005 alone. Earlier this year it announced that it would slow its growth but today’s announcement goes one step further.

The stores identified for closure are spread across all major U.S. markets with approximately 70 percent of them opened since the beginning of fiscal 2006.

Though likely not surprising to anybody, year over year investment sales both in the United States and on a worldwide basis are down dramatically. According to a Jones Lang LaSalle (NYSE:JLL) report cited by NREI, first quarter investment sales in the US came in at $39.2 Billion, a number which is down 69% from the year ago period.

Internationally, investment sales during the first quarter were $154 Billion, which is down 46% less than the $283 Billion number from a year ago. This statistic was provided by Real Capital Analytics.

There is a lot of money currently waiting on the sidelines to acquire assets, but for the time being sellers are not conceding much on price. That might change though over the course of the next one to two years as loans mature. As Macklowe Properties found out, refinancing a short term loan in this market is difficult to do. If owners don’t can’t meet the heightened equity requirements currently facing those looking to acquire or refinance assets, they might be forced to sell.