Starbucks net lease and ground lease basics

Starbucks is one of the most-searched net lease tenants, partly because the format — small drive-thru corners with heavy traffic — is exactly what a lot of investors want. But 'a Starbucks deal' can mean two very different structures.

Lease versus ground lease

Some Starbucks locations are corporate NN or NNN leases where you own the building and land. Others are ground leases, where the tenant owns the building and you own the land underneath. Ground leases usually trade at lower cap rates and carry lower risk to your land position, with a different residual picture — at the end of a ground lease, the improvements typically revert to the landowner. Know which one you're buying before anything else.

Term and escalations

Primary terms are often in the 10-to-15-year range, and — unlike the classic flat drugstore lease — these frequently include rent escalations. Built-in bumps are a meaningful positive: they protect your real income over the hold.

The real estate

The value is the corner: drive-thru capability, visibility, and traffic. The format has had tailwinds, but tailwinds don't underwrite a specific site — the access, the queuing, and the trade area do.

Due-diligence checklist

• Corporate lease or ground lease — and who exactly signs (corporate versus a licensed operator).
• Remaining term, options, and the escalation schedule.
• Drive-thru configuration, access, and visibility.
• For a ground lease, the reversion terms for the improvements.

General education only, not investment advice. Confirm the structure, the signer, and the lease terms independently.