Starbucks heads south? Coffee giant takes large office in Nashville, documents show

SEATTLE – In the latest sign of Starbucks’ shifting strategy, the Seattle-based coffee giant is leasing a 250,000-square-foot office big enough for 2,000 people in Nashville, Tennessee, according to a copy of the lease viewed by the Seattle Times.

The lease, which starts June 2027 and runs for as long as 23 years, was signed by Starbucks on March 3, and has not been previously reported. It includes most of a new six-story office building in an upscale mixed-use development near downtown overlooking the Cumberland River.

Tennessee officials have said they expect Starbucks’ Nashville expansion to bring the state “hundreds, if not thousands, of jobs” under a state recruitment program that reportedly will pay Starbucks hefty tax incentives.

As it has previously, Starbucks officials on Tuesday said Seattle remains its North America and “global support HQ,” and that it has no plans to move from its headquarters in Seattle’s Sodo Neighborhood, where it has been since 1997. The company has also characterized its Nashville plans as part of a move to expand its retail into the Southeast.

And at 249,988 square feet, the new Nashville office is clearly not a replacement for Starbucks’ iconic Seattle headquarters building, where it is reportedly leasing more than 1 million square feet through 2038, and where around 3,750 headquarters-based employees were based as of 2023.

But the Nashville lease, in the city’s up-and-coming South Bank Neighborhood, also appears to be Starbucks’ largest corporate expansion outside of the Seattle area.

It’s another sign of the company’s shifting strategy under CEO Brian Niccol, who was hired in 2024 to revive the struggling coffee giant. Since then, Starbucks has rolled out an ambitious strategy that mixes aggressive expansion with hundreds of stores closures and steep corporate layoffs.

The Nashville outpost is also likely to be deeply unsettling to many in Seattle.

Already, some Starbucks employees are worried they’ll either have to move to Tennessee or leave the company.

The Nashville move is also likely to fuel complaints among Washington business leaders that new state and local taxes encourage big employers to expand, or even relocate, to places like Tennessee, that promise no individual income tax and even offer tax breaks.

“I’m stunned,” said Kevin Daniels, who redeveloped the Sodo property where Starbucks is headquartered in the early 1990s and co-owns the property.

“As a landlord, I’m concerned (Seattle employers are being) incentivized to relocate somewhere else with a more business-friendly environment,” Daniels added.

Complaints by Seattle-area business leaders have intensified since March 3, when Starbucks announced it would be shifting its logistics operations to the Nashville area.

At the time, the logistics move seemed fairly modest, with Starbucks reportedly planning to offer to relocate “dozens” of Seattle-based employees” to Nashville, according the Wall Street Journal.

But within days, Starbucks’ Nashville initiative was being touted in grander terms.

Media accounts indicated Starbucks was considering a 250,000-square foot lease at Peabody Union, a nearly 5-acre development with retail space and upscale residential units in a neighborhood that has been the focus of major revitalization efforts.

On March 10, Tennessee Gov. Bill Lee told Nashville-area business leaders “I suspect there will be hundreds, if not thousands, of jobs” from Starbuck’s Nashville expansion, according to a report in the Nashville Business Journal.

At that time, Lee said he hadn’t been given exact job numbers from Starbucks. But Lee noted that had spoken with Niccol, adding that “we know that this is a major … secondary corporate move for them, and kind of an East Coast corporate move.”

It’s unclear how many Starbucks jobs that will actually be, or how many would come from Seattle.

Employers typically budget between 125 square feet and 250 square feet of office space per employee, meaning Starbucks could conceivably put between 1,000 and 2,000 workers in the space.

But Nashville has plenty of office space, including in another new building in South Bank across the street from Peabody Union, according to market reports.

The lease, which was signed by Starbucks Chief Financial Officer Cathy Smith and Nicole Mahon, a representative for the property owner, also includes 625 parking spots, and 10 VIP parking spots, and an option for valet parking.

And while Starbucks hasn’t commented on how many jobs might ultimately go to Nashville, it has left itself wiggle room.

When it announced the logistics move March 3, the company told employees the move was focused on “teams from within Supply Chain,” according to an internal email viewed by the Seattle Times.

But the email also noted that, “as we continue our work to unlock further growth, the company will evaluate whether it makes sense to add additional teams and roles in Nashville over time.”

The Nashville move is another piece of the turnaround strategy by Niccol, who earned accolades for reviving Chipotle – including moving its headquarters – and who has been shaking up Starbucks since he arrived.

That shake-up has included efforts to restore some of Starbucks’ traditional appeal, with slimmed down menus, simplified pricing and homier cafes.

It has also meant cuts. 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 nonretail workers in Seattle and Kent, along with 1,100 corporate employees.

But Starbucks, which currently operates around 17,000 locations in the United States by some accounts, has also announced ambitious expansion plans, with thousands of new stores in parts of the country where Starbucks isn’t as prevalent, such as the East Coast and Southeast.

The company said the Nashville location would “establish a strategic presence in the Southeast,” according to internal communication.

The company also lauded Nashville for its “deep, talented and growing workforce, making it a desirable location for us,” as Mike Grams, Starbucks’ chief operating officer, noted during the March 3 announcement.

Real estate experts say the expansion will be expensive for Starbucks.

The lease alone starts at around $11 million annually and escalates over time. Relocating employees and operations will also be disruptive.

But Tennessee has tried to make it worth Starbucks’ while.

Starbucks is reportedly receiving tax breaks for the jobs it brings under Tennessee’s Tax Incentive Fast Track Economic Development Program, the Nashville Business Journal reported earlier this month, although the amount has not been publicly disclosed.

The state Department of Economic and Community Development, which manages the program, did not immediately respond to questions about how much Starbucks is receiving or the number of jobs Starbucks has committed to bring to the state.

The Metropolitan Government of Nashville and Davidson County is also considering cash grants to Starbucks for new jobs, the Business Journal reported.

Metro, as it’s called, has yet to make any decisions about paying Starbucks, said Alex Apple, Metro spokesperson, in a Tuesday email.

However, earlier this month, Metro Mayor Freddie O’Connell told the Journal Starbucks’ office plans in Nashville appeared to align with the grant criteria.

“Initially, on expectation of jobs created, salaries, where we expect they might look from a location standpoint – it’s checking the boxes in that regard,” O’Connell said.

Nashville might also offer a way for Starbucks to cut costs.

The average hourly wage in the greater Nashville Area – $30.92 – is 28% lower than in the Seattle area, and 5% below the national average, according to 2024 data from the U.S. Bureau of Labor Statistics.

Tennessee offers a way to escape from some of Washington’s recently imposed tax hikes.

Last year, Seattle increased taxes on sales, property and larger businesses. And earlier this month, Washington lawmakers approved a new 9.9% tax on incomes greater than $1 million.

By contrast, Tennessee’s lack of a personal income tax might make a Nashville office especially attractive to some of Starbucks’ high earners.

At least six of Starbuck’s “named Executive Officers,” including Niccol and Smith, earned at least $6 million or more in total compensation in fiscal 2025, according to the company’s 2026 proxy statement.