SEATTLE—Starbucks is asking its landlords for a year-long break on rent, according to The Seattle Times.
"Effective June 1 and for at least a period of 12 consecutive months, Starbucks will require concessions to support modified operations and adjustments to lease terms and base rent structures," according to a May 5 signed by Starbucks COO Roz Brewer that was sent to landlords, according to publication.
"This is the worst recession since the Great Depression and far more devastating than the global financial crisis," Brewer wrote. "What lays ahead is daunting but by no means insurmountable with a shared commitment and a clear path forward."
Starbucks, of course, is among countless retailers that have had to ask for assistance with their rent. The retailer closed more than half of its 13,700 company-operated stores during the pandemic, leaving only 44% open, according to a letter to shareholders from CEO Kevin Johnson and CFO Patrick Grismer. In addition, 55% of its 6,000 licensed locations remained open. For the first quarter, it reported that its same-store sales fell 10% globally.
It is unclear how much leeway Starbucks will be granted. Increasingly landlords have been pushing back against retailers' request for rent relief, especially if they perceive that the company has the money to pay the rent. This is especially true of national brands.
By May 9, Starbucks partners had been slated to have opened more than 85% of company-operated stores across the US. The company expects more than 90% of stores to be open by early June, under modified operations and hours.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
