Outset Coffee, the San Francisco cafe chain once celebrated for its Asian-inspired blend of coffees, matcha and fruit juices, has lost both of its storefronts after landlords took the company to court over unpaid rent. A San Francisco Superior Court judge awarded one landlord possession of the property and entered a $200,000 judgment against Outset covering back rent, attorney fees and interest tied to its Mission District location.
The eviction and judgment were first reported by the San Francisco Chronicle, which reviewed court records showing landlords at 90 New Montgomery Street and 790 Valencia Street claimed Outset collectively owed more than $223,000 in back rent and other charges. The San Francisco Sheriff's Office, which the Chronicle's reporting notes is the only agency authorized to carry out court-ordered evictions in the city, said Outset had vacated the 90 New Montgomery Street premises in August after an earlier attempt to remove the company there in January fell through.
Outset opened its first location at 790 Valencia Street in June 2023, under a lease that ran through April 2028. The company later opened a second location at 90 New Montgomery Street, a 1,500-square-foot space at Mission and New Montgomery streets that served coffee from Arkansas-based roaster Onyx Coffee Lab, in January 2024.
Two Landlords, Two Lawsuits
The legal trouble came from separate directions. MW790VALE LP, the landlord at the Valencia Street address, filed suit in June 2025, alleging Outset had stopped paying rent after the end of 2024 and claiming the company owed over $100,000 in unpaid rent by April 2025. The landlord said in its lawsuit that Outset had stopped communicating and appeared to have abandoned the space altogether.
Meanwhile, 90 New Montgomery Partners served Outset with a three-day notice to pay rent or quit in October 2025, alleging more than $121,000 in unpaid rent and valuing the company's continued occupancy at $390 a day. The base rent at Outset's 90 New Montgomery Street shop was $9,500 a month in 2025, a figure that gives some sense of how quickly the back-rent claims piled up. Court records indicate Outset never responded in court to either lawsuit.
Fuji Inc. was Outset's parent company and guarantor of its leases, and Heng Qiu managed the company's day-to-day operations. Qiu had told Eater in 2025 that the company was in negotiations with its landlord, though the outcome of those talks is not detailed in court filings. At one point, Outset described itself publicly as merely “temporarily closed” due to “staffing changes.” Both of its San Francisco locations have now shut down.
A Founder With a Pattern of Rent Disputes
Outset was owned by Toby Sun, who also co-founded bike-share company Lime before stepping down as its chief executive in 2019. Sun went on to create Zero&, an Asian-inspired fruit tea and beverage chain that raised millions of dollars and expanded to lease around a dozen locations across the Bay Area, Southern California and Boston. Sun also opened the two Outset Coffee locations.
Zero& has faced its own string of rent disputes. According to the same Chronicle investigation, the chain confronted landlords' claims of rent delinquencies in Russian Hill, Pacific Heights and at the Stonestown Galleria, and most Zero& shops appear to have closed within the last two years. In a separate Chronicle report on the tea chain, Sun confirmed the Fillmore Street location would close permanently, telling the outlet, “It's just unsustainable in some locations.” That same report detailed an unlawful detainer complaint at the Stonestown Galleria location alleging $145,638.04 in unpaid rent for 12 months, a notice at the 2360 Polk Street location citing $70,919.95 owed, and an October filing on the Fillmore Street shop demanding $9,785 in back rent plus roughly $3,587.87 in damages. Both Outset Coffee and Zero& currently have offline websites.
A Tightening Retail Market
The closures land amid a retail market that is, by some measures, firming up even as individual tenants struggle. San Francisco's retail vacancy rate stood at 6.6% in the third quarter of 2026, down slightly from 6.7% a year earlier though up from 6.4% the previous quarter, according to Kidder Mathews. Average asking rents for retail space in the city climbed to $36.56 per square foot annually, a 9.66% jump from the prior year, while the market still posted negative net absorption of nearly 60,000 square feet for the quarter alone.
San Francisco lawmakers have also been weighing changes to how small debts can trigger evictions. According to Mission Local, the Board of Supervisors unanimously passed legislation setting a new monetary threshold before an eviction can proceed over unpaid rent, and KALW reported the city was advancing an ordinance aimed at banning evictions over small debts. It remains unclear whether any such measure was in force at the time of Outset's case or whether it would have applied to its commercial leases.
