Chiao: Philz is unique in that we are the only coffee purveyor that is completely dedicated to the art of hand-crafted coffee. You won't find any espressos, lattes, or frappes; just amazing custom blends by Phil Jaber—who transformed his corner store in the Mission neighborhood of San Francisco to the first Philz location in 2002—and his son Jacob, now CEO. Each cup is freshly ground and hand brewed by the cup so it is made for each customer's taste. We view each store the same way we view crafting the perfect cup of coffee; it is all about creating something just right for each community we are a part of.

GlobeSt.com: How is this company capitalizing on coffee's popularity in the retail real estate realm?

Cohen: Philz has been able to take its exceptional product to the consumer by opening locations in everything from small shopping centers to larger multi-building/multi-tenant centers and in stand-alone locations. The popularity of the brand and the remarkable reputation has had landlords very interested in the Philz concept for their centers.

Chiao: In a world where Internet and app life has vastly changed the retail landscape, Philz is thriving because coffee is a part of people's daily lives, and our shops are often ingrained in the community as a student's study, a tech founder's first office and a kitchen table for old friends. We also live in a world where there is a greater appreciation of craftsmanship and quality so consumers, and thus landlords, will seek out more-diverse retail partners besides the traditional players. So, we are in the fortunate position that coffee is often a must-have for landlords and appreciate that we are often the preferred coffee tenant.

GlobeSt.com: What retail strategies is this company employing in its approach to real estate?

Cohen: Philz is experiencing measured and smart growth, focusing on its core markets in California, DC and soon to be Boston. Overall, the retail leasing market is pretty healthy, which can cut both ways. Healthy markets tend to have higher rents, but they also have other retail and public transit and foot traffic that less healthy markets don't.

Chiao: Our philosophy is to lead with people—both internally and externally. Like every retailer, we are subject to the forces of the market, but our people are at the heart of our business. We take our store team and retail leadership into account so our store growth is calibrated to match our ability to grow a great team and externally; we listen to all requests and suggestions from customers. Similar to our “one cup at a time” approach, we take a “one store at a time” approach when it comes to our expansion efforts.

GlobeSt.com: Has the real estate leasing market been favorable for your company and business?

Cohen: Because of Philz's reputation and fan base, it has become a sought-after brand in the retail market. This provides Philz with great opportunities to enter great retail centers. Urban real estate can occasionally be tricky in terms of negotiations due to greater regulation by cities and neighborhoods. There also can be challenges in various urban areas from neighborhood to neighborhood in terms of rents. However, the real estate strategy does tend to follow the marketing/positioning/branding strategy, and we work hard to preserve and enhance the brand first and foremost.

Chiao: It really depends on the focus of the parties involved. The retail market has definitely been a bit frothy as of late; so, if the focus of a landlord is purely driven by hitting certain pro forma numbers and returns, then that could be a challenge. Luckily, many landlords we work with are looking to break the formulaic approach and will place a higher weight on community and a brand's value and passionate customer base, which works well for us.