As an leasing agent or as an owner it is always a test of skill to put the right group of tenants together in a small center. You should be careful not to be the wrong kind of competing businesses together. However, there are those that fall into the category of "the right kind of competing businesses". Those are compatible businesses that can help one another and also help draw customers to the center.
In the case of your example, I believe the current coffee shop is simply being selfish and unreasonable. If you indeed have no restrictions in their lease, I would say go for it!
However, there are a few caution signs. What is the term of the lease with the coffee shop? What is the rent they are paying? And, how likely are the to move at the end of their lease? If there is enough time left on the lease the coffee shop will likely find that the new tenant is not the danger they envisioned. If there is a short time left on their lease then you must measure the risk of losing them against the gain of the new tenant and the commensurate costs of placing the new tenant in the center.
Onward and upward Doug..... Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: email@example.com
Apr 21, 2011