Whole Foods CEO: Stores raise home prices

March 18, 2011
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Market named in real estate ads

HYDE SQ.—A new Whole Foods Market grocery store will boost local housing prices, according to comments from Whole Foods founder and CEO John Mackey in a 2007 interview.

And a Gazette look at Craigslist online real estate ads shows that local realtors are starting to use the impending grocery store opening as a marketing tool.

In response to a question about whether “people go after real estate in neighborhoods where a Whole Foods is slated to open,” in a 2007 interview posted on CNNMoney.com, Mackey said the company has not studied the phenomenon, but said he believes it is true.

“…I understand that when we opened in Chelea [in New York City], condos above the store went up by 10 percent in price on the first day,” Mackey said in the interview, “I can look out my window in Austin, where we have our flagship store, and people are building condos all around.”

“The joke is that we could have made a lot more money just buying up real estate around our stores and developing it than we could make selling groceries,” he said.

A portion of that quote was publicized last week as evidence that a Hyde Square Whole Foods would accelerate the gentrification of the neighborhood by members of the local anti-Whole Foods group Whose Foods? Whose Community? The Coalition for an Affordable and Diverse JP.

At another point in the interview, Mackey discussed Whole Foods Market’s expansion strategy: “The most important thing is density of college grads…That’s a better indicator for us than income. Everyone thinks we cater to the rich, but it’s really not true. We cater to the well-educated. The reason is that for people to change their dietary habits requires that they be well-informed,” he said.

Whole Foods spokesperson Heather McCready did not respond to Gazette requests for comment for this article.

It is not clear that the possibility of a Whole Foods in Hyde Square has had any affect on residential rents in the area. But last week, the Gazette found two ads from rental agencies on Craigslist that promoted Hyde Square units on the basis of their proximity to the future grocery store.

“[S]teps to the new and coming Whole Foods,” one ad for a $1,600-a-month, two-bedroom apartment said.

The other—for a $3,800-a-month, six-bedroom apartment—included Whole Foods amidst a list of other local businesses in the area, including tapas bar/book store/record store Tres Gatos, breakfast restaurant Sorella’s and the restaurant Canary Square.