Site icon Live in the Hollywood Riviera

Why it’s Smart to Pay Attention to the Starbucks Principle

Looking for a home in an area that will have long-term value and appreciation? Go get a coffee at a Starbucks in your desired area and experience what’s become known as the “Starbucks Principle” — an easy way to help you judge the potential long-term value and desirability of the area you are considering. Basically, if you see a new Starbucks being built — or a large expansion/remodel of an existing Starbucks — then that likely will be a good area in which to buy a home.

 

What does a coffee shop have to do with your home value? Here, an explanation from RISMedia:

• Franchises such as Starbucks dedicate vast resources to gathering information on demographics, population growth, disposable incomes and development. Before a company this size dedicates massive resources and capital, they make sure they know everything they can about the surrounding population, businesses and long-term potential for growth.

• Beyond their own in-company resources, Starbucks also has large numbers of developers and commercial real estate brokers seeking out their business. To get the company to buy or lease in a given location, there must be a strong amount of data to support the sales and growth potential of the area. The company uses all of those resources to make sure it places stores in valuable locales.

• Starbucks definitely will make sure that the data for disposable income, population projections, business growth and other factors support a new or expanded store; but the addition of a store to an area can actually create growth around it as well. When other businesses see Starbucks adding a store, they notice and frequently will flock to the area as well, which, in turn, brings people to retail centers.

Exit mobile version