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San Francisco coffee company Outset Coffee has closed its Valencia Street and New Montgomery Street cafes following separate disputes with its landlords. Court records cited by Daily Coffee News show a $200,196 default judgment in the Valencia Street case and a judgment granting the downtown landlord possession; the Sheriff’s Office returned that property on July 29, 2026.
Outset Coffee has closed both of its San Francisco cafes after separate disputes with the landlords of its Mission District and Financial District locations, according to Daily Coffee News. The legal cases resulted in a $200,196 default judgment tied to the Valencia Street cafe and a court order granting possession of the downtown property to its landlord.
On October 7, San Francisco Superior Court entered a default judgment against Outset Coffee SF 2205 LLC and parent company Fuji Inc. in a lawsuit brought by Valencia Street landlord MW790VALE LP. Court records reviewed by Daily Coffee News show the award totals $200,196: $166,194 in damages, $21,222 in interest, $10,752 in attorney fees and $2,027 in court costs.
The landlord’s June 2025 complaint alleged that Outset stopped paying rent after December 2024 and owed about $101,375 in rent and other charges by April 2025. It also said the cafe had posted a temporary-closure notice citing staffing changes and had stopped responding to communications. The landlord said it terminated the lease on April 29, 2025, after serving notices that stated it believed the business had abandoned the premises. Those details are allegations in the landlord’s complaint.
In the separate downtown case, 90 New Montgomery Partners filed an eviction lawsuit in October 2025, alleging that Outset owed $121,775 in unpaid rent and other charges. The court awarded the landlord possession on December 30, 2025. The San Francisco Sheriff’s Office returned possession of the property on July 29, 2026, according to the report. Daily Coffee News said it had contacted Outset’s ownership for comment.
Two Cafes Lost in Separate Cases
The closures remove a small, locally recognized coffee operator from two San Francisco neighborhoods and show how commercial lease disputes can end in distinct legal outcomes: a monetary judgment at one site and a possession order at another. The judgment’s listed components also make clear that the Valencia case involved more than the unpaid-rent amount alleged in the original complaint, though the complaint and final award describe different figures and stages of the case.
For customers and nearby businesses, the closures mean Outset’s two locations are no longer operating as cafes. The Valencia site had also become part of a changing retail landscape: Eater San Francisco reported in September 2025 that bubble tea chain Little Sweet was taking over the location. That report offers a possible next use for the space, but it does not establish the current status of any lease or opening plans.
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From Valencia Opening to Closure
Outset opened its original cafe at 790 Valencia St. in summer 2023, serving espresso drinks alongside specialty beverages featuring ingredients such as durian, osmanthus and yuja. The business was backed by Fuji Inc., which also owned fruit tea brand Zero& and bakery brand Hanabi. Outset’s menu and use of fruit ingredients helped distinguish it from more conventional coffee offerings.
The company expanded in January 2024 with a roughly 1,500-square-foot cafe at 90 New Montgomery St., near Mission Street in the Financial District. It later received local recognition, including inclusion in the San Francisco Chronicle’s 2024 guide to the Bay Area’s best coffee shops. In July 2025, co-founder Heng Qiu told Eater San Francisco that his business partner was negotiating with the Valencia landlord in hopes of reopening the original cafe. The later report that Little Sweet was taking over the site marked a further change in its reported plans.
Fuji Inc. is headed by Weiyao Sun, also known as Toby Sun, a co-founder of electric scooter company Lime, according to Daily Coffee News. The report says Sun’s Zero& beverage chain has faced separate landlord disputes and evictions. Those matters are distinct from the two Outset cases and do not, by themselves, establish the reasons for Outset’s closures.
“The landlord alleged that Outset had stopped making rent payments after December 2024 and owed approximately $101,375 by April 2025.”
— MW790VALE LP, in its June 2025 complaint, as described by Daily Coffee News
Outset’s Response and Remaining Details
Outset’s account of the disputes is not included in the report. Daily Coffee News said it had reached out to the company’s ownership for comment, but the supplied report does not provide a response. The reasons for the alleged payment problems, whether Outset contested either case, and whether the company plans to continue operating in another form are not established by the available information.
The legal records also concern different cases and different points in time. The $101,375 cited in the Valencia landlord’s complaint was an alleged balance as of April 2025, while the $200,196 figure is the later judgment entered on October 7. In the downtown case, the reported $121,775 was the landlord’s allegation; the supplied account confirms a possession judgment and the Sheriff’s return of the property but does not detail any final accounting of money owed.
The report says Little Sweet was taking over the Valencia site, but does not confirm whether it has opened there. It also does not state whether the downtown space has a new tenant or what will happen to Outset’s staff, equipment or brands.
Future Plans and Property Tenants
The next developments to watch are any response from Outset or Fuji Inc. and any updates about the two former cafe sites. A company statement could clarify whether Outset considers the closures permanent, whether it intends to reopen elsewhere and how it views the court cases. The supplied report does not announce a planned reopening or a further court date.
At the Valencia address, reporting that Little Sweet was taking over provides a potential direction for the premises, but its opening status remains unconfirmed here. The downtown property was returned to 90 New Montgomery Partners in July, and no replacement tenant is identified in the source material. Until either the landlords or prospective operators provide updates, the sites’ next uses remain unresolved.
Key Questions
Why did Outset Coffee close both cafes?
The closures followed separate landlord disputes. One involved the Valencia Street cafe and led to a default judgment; the other involved the New Montgomery Street cafe and resulted in a court order awarding the landlord possession. The landlords’ claims about unpaid rent are allegations as described in the report.
How much was the Valencia Street judgment?
San Francisco Superior Court entered a $200,196 default judgment on October 7 against Outset Coffee SF 2205 LLC and parent company Fuji Inc. The amount includes damages, interest, attorney fees and court costs.
What happened to the Financial District cafe?
The landlord, 90 New Montgomery Partners, sued in October 2025, alleging $121,775 in unpaid rent and other charges. A court awarded it possession on December 30, 2025, and the San Francisco Sheriff’s Office returned the property on July 29, 2026.
Is Outset Coffee reopening?
The report does not confirm a reopening plan. In July 2025, co-founder Heng Qiu told Eater San Francisco that his business partner was negotiating with the Valencia landlord in hopes of reopening that cafe, but the later report describes both cafes as closed and does not identify a new Outset location.
Who may take over the Valencia Street location?
Eater San Francisco reported in September 2025 that Little Sweet was taking over the location. The supplied report does not confirm whether the chain has opened there or provide an opening date.
Source: dailycoffeenews.com
