Starbucks may be eyeing significantly more office space in Tennessee than it has previously acknowledged.
The Seattle-based coffee giant is reportedly considering 250,000 square feet of office space, or enough for up to 2,000 employees, in Nashville, according to a story last week in CoStar News, a real estate journal.
One location Starbucks is reviewing is a brand-new six-story office building overlooking the Cumberland River in downtown Nashville, according to CoStar, citing “people with knowledge of the search.”
Starbucks didn’t respond Monday to questions about the CoStar story or a potential lease in Nashville. The company has said repeatedly it has no plans to move from its headquarters in Seattle’s Sodo neighborhood, where it has been since 1997, and where it reportedly renewed its lease only last year.
But the CoStar report comes amid a major uncertainty about Starbucks and its relationship to Seattle as it plots a turnaround under CEO Brian Niccol, who took over in 2024.
The heightened focus on Nashville will also fuel a heated, occasionally hyperbolic debate over the risk that regulation and taxes — including a recently enacted state “millionaires” tax on high-income residents — are encouraging employers to look to other cites and states.
Starbucks has already announced plans to move its logistics operations to the Nashville area. That move, announced earlier this month, appeared comparatively modest in size and would reportedly affect “dozens” of employees now working in Seattle, according to The Wall Street Journal.
But if Starbucks were to lease a 250,000-square-foot office, that would suggests a substantially bigger change for the company.
Starbucks didn’t respond when asked how many workers are at the Sodo headquarters. According to The Puget Sound Business Journal, Starbucks has more than 3,500 workers at the Sodo facility and at other offices in the region.
Metropolitan Nashville and the rest of Davidson County have been aggressively recruiting employers. The area already hosts locations for other major employers, including Seattle-based Amazon, HCA Healthcare and Nissan North America.
Starbucks announced the new logistics center jointly with Tennessee Gov. Bill Lee and officials with the state’s Department of Economic and Community Development, which offers substantial tax incentives for companies that bring jobs and investment to the state.
Niccol, who is credited with turning around an ailing Chipotle before coming to Starbucks, hopes to do the same for the coffee giant under an initiative dubbed “Back to Starbucks.”
That strategy was said to focus on restoring some of Starbucks’ traditional character, with slimmed down menus, simplified pricing and homier cafes.
It has also meant some downsizing. Last year, Starbucks closed several hundred stores in the U.S. and Canada, including more than 30 locations in Washington. It also laid off nearly 1,000 retail and non-retail workers in Seattle and Kent, along with 1,100 corporate employees.
That culling has continued with five more closures in Seattle this month.
But Starbucks, which currently operates around 17,000 locations in the United States by some accounts, has also announced ambitious expansion plans.
In January, the company told investors it could build as many as 5,000 more U.S. locations, including many in the South and the Northeast, where Starbucks is less popular, according to The Wall Street Journal.
“To support these ambitions, we have made the decision to establish a strategic presence in the Southeast region of the U.S.,” the company explained in an internal communication, The Journal reported.
Until recently, the proposed logistics center in Tennessee, whose exact location has yet to be disclosed, was all that was known about that strategic presence.
But the CoStar report suggests that the presence could substantially larger.
Starbucks put out a call for 250,000 square feet, CoStar said, adding that a lease deal had yet to be finalized and that Starbucks hadn’t settled on a specific property.
Starbucks was working with CBRE, a national commercial real estate firm, to find office space, and had looked at the Peabody Union property, which opened last year but has yet to formally land a tenant, CoStar said.
The 5-acre, 1.2-million square foot complex includes a 27-floor residential tower, a plaza with 50,000-square feet of dining and retail space, and the six-story office, according to the website of Turner Construction Company, which handled preconstruction and construction management services on the $284 million project.
It’s unclear how many employees would work in the Nashville office tower if Starbucks were to least it, or whether those roles would be transferred from Seattle.
Employers typically budget between 125 square feet and 250 square feet per employee, meaning Starbucks could conceivably put between 1,000 and 2,000 workers in the space.
Before COVID-19, Starbucks was said to have had around 5,000 employees in the Sodo headquarters building. It’s not clear what that number is today following recent cutbacks.
As CEO of Chipotle, Niccol moved that company’s headquarters from Denver to Newport Beach, Calif., where he then lived and still maintains a residence.
However, shortly after taking the helm at Starbucks, Niccol insisted that moving Starbucks’ headquarters “right now is not on the list of things to do,” Niccol told Yahoo Finance soon after joining the company in 2024.
Regardless, news of Starbucks searching for a larger lease is sure to fuel doubts about the ability of Washington and Seattle to attract, or simply hold onto, key employers.
Last week, Howard Schultz, former longtime CEO of Starbucks, announced his departure to Miami in a post that many saw as a rebuke of recent increases in state taxes.