Starbucks Coffee Will Open Along Route 12A

  • A Starbucks is planned for a new building that will also house an Aspen Dental clinic on Route 12A in West Lebanon, N.H. (Marcus & Millichap illustration) Marcus & Millichap illustration

Valley News Staff Writer
Published: 6/6/2017 4:01:02 PM
Modified: 6/7/2017 12:03:38 AM

West Lebanon — Starbucks is coming to West Lebanon, and while the building’s foundation has only just been laid, its developer already has put the site up for sale.

Michigan-based commercial real estate developer Alrig USA, which bought the former Pizza Hut location on Route 12A, has listed the parcel and new building it is erecting on the site for sale through a New York real estate brokerage firm.

Alrig, through affiliate West Lebanon Retail Management LLC, acquired the 0.9-acre parcel tucked between Burger King and Denny’s for $1,725,000 in October, according to Grafton County real estate records. West Lebanon Retail Management earlier this year was granted separate permit approvals by Lebanon’s Planning and Zoning Department to tear down the former Pizza Hut building for $10,000 and build a new, 6,000-square-foot structure for $922,000 and outfit the interior for $250,000.

Work on the building is underway, but construction was temporarily halted this week due to the rain.

Now the entire project, which includes multiyear rental leases with Starbucks and an Aspen Dental office, has been listed for sale with an asking price of $4.2 million, according to an offering memorandum from Marcus & Millichap, the Calabassis, Ca., real estate company representing Alrig.

Starbucks, in an email to the Valley News, said it is “always looking for great locations to better serve our customers” and said it expects the sit-down cafe, which also will include a drive-thru service window and tables for outdoor seating, to open in 2018.

But the developer said he expects the project to be ready for tenant occupancy by the fall. He said his firm has been scouting development opportunities in New England, and the West Lebanon site was too good to pass up.

“We do a lot of work around the country in retail development, and looking around in different markets this (property) came to us,” said Brandon Schram, head of acquisitions at Alrig.

“This is a very good corridor and the city was terrific,” he said of the Lebanon officials who helped to shepherd the plan through.

Alrig, founded in 2010, has developed more than 50 commercial projects in Michigan and around the country in addition to owning and managing 1.5 million square feet of office space in Detroit, according to the company’s website.

But the West Lebanon project is Alrig’s first in the Twin States, Schram said.

“We definitely plan to do more in the area,” he said.

The nearest Starbucks to West Lebanon is in Hanover, where it opened in 2012 in the former Campion’s department store building. The brand also is served at the coffee counter in the Barnes & Noble-owned Dartmouth Bookstore. But there are no other Starbucks in the Upper Valley, according to the company’s website, with the next nearest outlets located in Montpelier and Concord.

Typically, when a Starbucks opens other independent cafes in the area suffer a hit in business, as the Dirt Cowboy and Umpleby’s Bakery reported happened when Starbucks opened in Hanover five years ago. But there are not any independent cafes in West Lebanon, and the only coffee shops Starbucks will be competing against are other chains.

In West Lebanon, Starbucks will compete with two Dunkin’ Donuts, McDonald’s and Panera Bread. The coffee and espresso bar inside the bookstore Books-a-Million closed last year when the store relocated to the Kmart Plaza from its previous location in the Valley Square Shopping Center, home of Walmart and Price Chopper.

The arrival of Starbucks to the shopping strip in West Lebanon is a sign of the shift to the “need and necessity” business category that commercial real estate developers are seeking to occupy in the spaces that once would have been filled by retail outlets.

As online retailing has increasingly cut into traditional brick-and-mortar stores, commercial real estate developers are seeking tenants whose products or services, such as food, refreshments and in-person health services, are not easily transferred to the internet.

“We’re seeing a lot of companies like Starbucks and Aspen Dental expand into these locations,” said Preet Sabharwal, a vice president at listing agent Marcus & Millichap’s New York office. “Starbucks has been trying to break into this market for two years.”

According to the offering memorandum for prospective buyers of the property, Starbucks will be paying $111,000 annually in lease payments, or $9,250 per month, for 2,220 square feet of space during the first five years, which rises to about $122,000 annually in the sixth year and increases 10 percent every five years thereafter.

Aspen Dental is contracted to pay $166,000 annually, or $13,834 per month, in lease payments for the first five years, escalating to about $179,000 in the sixth year and increasing 10 percent every five years thereafter. Both leases run through 2027.

The prospect of Starbucks opening on Route 12A drew a variety of responses, ranging from mild interest to outright indifference, from people outside of Panera Bread on Tuesday afternoon. Some said they could always rely upon Starbucks for a consistently produced coffee, while others thought the prices it charges are a bit steep for West Lebanon.

But Andrea Courtney, a graduate student in brain sciences at Dartmouth College who lives in Enfield, said that while she “prefers local coffee shops” over chains, she nonetheless noted that most of the area’s independent cafes — Dirt Cowboy and Umpleby’s in Hanover — close early “and Tuckerbox (in White River Junction) is getting busy for dinner.”

Apart from the Starbucks in Hanover, “there’s not a good spot” where people can go and just sit and not be rushed, she said.

“It’s really inconvenient,” Courtney said, adding that a Starbucks in West Lebanon probably would help to “solve the problem of somewhere to go.”

John Lippman can be reached at jlippman@vnews.com or 603-727-3219.




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