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Starbucks finds out that a commercial tenant can’t just walk away

On Behalf of | Jan 30, 2018 | Landlord / Tenant |

Landlords here in Orange County enter into lease agreements expecting each party to fulfill the terms of those contracts. When a commercial tenant attempts to walk away from the lease without paying, the landlord may need to take that tenant to court. This is what happened when Starbucks broke numerous leases for its Teavana stores across the country.

One landlord, Simon Property Group, held approximately 77 of the leases for Teavana stores in various locations. One of the biggest fears the landlord had was that it would cause a chain reaction of stores leaving those shopping centers, which would jeopardize its business as a whole, along with the communities in which they operate. That fear may be founded since Starbucks’s closure of all 379 stores nationwide put 3,300 people out of work.

The lawsuit sought to make Starbucks live up to its end of the bargain. Simon Property Group wanted the retail giant to keep stores operating through the end of the leases instead of simply closing their doors. Recently, the parties reached some sort of settlement. None of the details of that agreement have been made public at this time.

Simon Property Group stood up to Starbucks, arguably a formidable commercial tenant due to its size. Orange County landlords whose tenants attempt to break their leases without fulfilling their obligations may also turn to the courts for help. In order to increase the likelihood of a landlord achieving a successful result through the litigation process, it may be beneficial to secure the advice and assistance of an experienced real estate attorney.

Source: Forbes, “Starbucks Settles With Simon“, Ronald Holden, Jan. 17, 2018