Tough economy spurs city’s high-end coffee shop expansions

From left: Dean Rosenzweig, vice president of retail services at CB Richard Ellis, and Manhattan locations of Think Coffee, Starbucks and Ninth Street Espresso

Perhaps because of changing tastes, a widespread backlash against Starbucks or lower retail rents, high-end coffee shops are making their mark on New York City real estate and expanding rapidly.

As the New York Times reported, Ninth Street Espresso, Roasting Plant, Jack’s Stir Brew, Gregory’s Cafe, Think Coffee, MUD, Blue Bottle Coffee, Cafe Grumpy, Stumptown Coffee Roasters, Intelligentsia Coffee and Joe the Art of Coffee are just some of the new breed of coffee makers, homegrown or imported from elsewhere in the country, that have descended upon the city with multiple locations in the last few years.

Coffee shops depend on volume so many are opening in office neighborhoods, retail brokers say, although the addition of baked items and packaged beans help them stay viable in residential neighborhoods where rents can be lower.

Starbucks’ expansion in the city certainly paved the way for the current influx of coffee shops, but the rough economic conditions helped, too.

“The higher jobless rates that came out of a softer market meant that more people were finding their entrepreneurial spirit within themselves,” said Dean Rosenzweig, a vice president of retail services for CB Richard Ellis who once worked in Starbucks’ real estate department. “The lower rents that came out of it were able to accommodate the model that a lot of these shops felt they needed to open up.”

And despite the strong odor the shops emit, landlords have less leverage in choosing tenants and began to welcome the food industry.

In a twist, perhaps responding to the proliferation of expensive coffee houses, Starbucks’ lower-end sister, Seattle’s Best Coffee, is plotting its expansion into the five boroughs, according to Rosenzweig. [NYT]