starbucks logo

I recently saw an article on CNBC.com about how Starbucks is competing with itself. Starbucks has opened so many stores that, according to BMO Capital Markets Research, there are now “3.6 Starbucks locations within a one-mile radius of the typical Starbucks in the US.”  That is up from 3.3 in 2014 and 3.2 in 2012.  New Starbucks stores typically perform very well.  However, analysts believe much of this business is cannibalization from nearby locations.

Do Americans really drink that much coffee? If so, it would seem we are always on a caffeine buzz.  I myself don’t drink any.  I do drink tea and I do go to Starbucks from time to time for Teavana tea (never Chai Tea Latte!).  I am a Starbucks Gold customer, mainly because I share my card with my wife and son.  In my suburban community and on my suburban commute, which is basically a straight line of about 11 miles, I pass 1 Starbucks and there is one across the street from my office.  However, I could easily divert to at least 6 other locations without losing more than 3-4 minutes on the say to work.

More telling, we were in New York a couple weeks ago, staying at a hotel on the Upper East Side. I got up on a Sunday morning and went for a cup of tea to the Starbucks 1 1/2 blocks from the hotel.  It was about 7:30 a.m. and the sign on the door said the store was to open at 5:30.  But it was not open!  Not to worry, my Starbucks App directed me 2 blocks up and 1 Avenue over.  But that store also missed its 5:30 opening (what’s up Starbucks?).  The App directed me back down 1 block and over 1 more Avenue and that Starbucks was open.  I could have gone on for blocks and for dozens more locations if necessary.

Starbucks is not alone in this coffee craze. On my commute, I directly pass 4 Dunkin Donuts, just in case I need a sugar high before work (and a nap a few hours later).  I could easily divert to at least 5 other Dunkins with no significant time lost.

As Dunkin says, “America Runs on Dunkin”. What we in real estate need to say to Starbucks and Dunkin is that Landlords run on Dunkin and Starbucks!

Hispanic referee between arguing neighbors

Sometimes the facts of a case are just sad. A tenant recently came to see me because he was being evicted from the condo he was renting.  He was not going to contest the eviction.  There were only 30 days left on the lease any way and, one way or the other, he had to move.  He had found a new condo to rent, but when the new landlord did a background check, he found about the eviction and the circumstances surrounding it and denied the rental application.  Now, the tenant wanted some sort of revenge.

The circumstances leading up to the eviction stemmed from the complaints of a cantankerous neighbor. The neighbor was an elderly man who lived with his even older mother.  From the day the tenant and his fiancée moved into the condo, the neighbor had issues.  The mother accused the tenant and his fiancée of being drug dealers (she is a nurse and he is a medical technician and has an at home e-commerce business).  The neighbor began to call condo security and file noise complaints.  The first complaint was about 2 months after the tenant moved in.  The neighbor complained about “loud music” at 6:00 p.m. on a Saturday.  Security responded.  When they arrived, they could not hear any music, but asked the tenant to keep it down.  The next complaint was filed for loud talking on the balcony at night.  Security was again dispatched.  Several similar complaints were filed and, at least one time, the police were called.  The police found no disturbance and did not file a report.

However, because of the number of complaints, the condominium association determined that the tenant was in violation of condo rules and advised the landlord, the owner of the condo unit that it had to evict the tenant. If landlord failed to evict tenant, association would fine landlord.  Therefore, landlord filed the eviction.

Tenant asked me if he could sue the association for defamation. However, everything that the association would have told a potential landlord was true – there were numerous complaints against the tenant and an action to evict was pending.  It didn’t matter if the neighbor’s complaints were not true.  We turned our attention to the neighbor.  The neighbor’s harassment of the tenant was the direct cause of the eviction and the subsequent denial of the tenant’s denial of a new lease. Neighbor was the cause of all of tenant’s problems.  Was there anything that could be done for the tenant?  What damage had tenant suffered?

Tenant expressed that he only wanted his reputation back. The eviction was damaging to him and his fiancée.  We discussed whether we could get some letter from the neighbor explaining that his false accusations led to the eviction.  But what leverage did we have to get such a letter?  A lawsuit perhaps?  The theories were sparse:  tortious interference with contract and slander and defamation.  These would be costly to prosecute and very difficult to prove.  And worst of all, a “crazy” defendant is a dangerous defendant.  Moreover, it really is not a good idea to use the court system for this purpose – to extract an apology.  Unless the tenant was willing to go all in on a lawsuit, we couldn’t take the case.

Looking back, my advice would have been, had the tenant called me as the neighbor was harassing him, to fight the complaints with the association at the time that they were made. Set the record straight as quickly as possible.  Make sure that the security reports were thorough and accurate.  If this were done, the association would have had no grounds to force the landlord to evict and, as the neighbor continued to complain, the association would have eventually stopped listening.  Sadly, one cranky neighbor affected another person’s ability to occupy and enjoy one condo and to rent another.  Tenant should have fought back early and hard.

 

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