After Starbucks unexpectedly announced Tuesday night that it would shutter all 23 La Boulange bakery locations, many Bay Area retail experts are closely watching to see what happens to the prime real estate left behind.
The popular bakery’s stores are mostly in San Francisco. There are also two La Boulange spots in Marin County, two on the Peninsula, and three in the East Bay’s Contra Costa County. La Boulange had also opened its new all-day concept that serves wine, beer and cocktails in Los Angeles last year.
Starbucks (NASDAQ: SBUX) declined to provide details about what’s next for the individual stores, but retail experts say La Boulange has a very strong real estate portfolio.
“It’s an A-plus portfolio,” said Matt Holmes, a principal at Retail West. “The best foot-traffic streets, well-designed, well-placed sites. It will be a feeding frenzy.”
Some of the La Boulange locations, including the North Beach and Hayes Valley spots, are closed off to formula retail. That means Starbucks, or any other large coffee or food chains, won’t be able to land there.
Because it was grandfathered in, La Boulange was able to stay in those locations even after expanding to its current size, but don’t expect new chains to set up shop there. Others will be subject to neighborhood restrictions that require a conditional-use permit for so-called formula retail — chain stores and eateries — and still others could be wide open to another coffee chain.
The 23 locations are all in different “microclimates” of the Bay Area, Holmes said, but they are all “prime locations, without question.”
While the future of La Boulange locations remains unclear, there has been a backlash from the community about Starbucks’ decision to close the beloved Bay Area bakery three years after purchasing the brand.
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