The Philz Coffee store at 1600 Shattuck Ave. will close Jan. 13, after the expiration of the shop’s lease.

The coffee chain is closing the Shattuck Avenue and Cedar Street location partly because of the operational challenges posed by the building’s “unique” layout but is attempting to find a new location nearby. It is not yet known what will replace Philz Coffee at the Shattuck location.

“Philz has changed a lot since we started in here — in what we want to offer,” said Francis Serpa, the manager of the Shattuck location. “We do a lot more food stuff but, here, we can’t — just because of the layout of the place, we can’t have a full kitchen.”

According to Serpa, the chain considered renovating the location to better fit its evolving needs, but such upgrades proved too costly, and it decided to find a new location once the lease expired. Serpa said the decision will not impact the jobs of the Shattuck branch employees, as the company is allowing workers to transfer to other branches.

In a letter to customers posted in the store, CEO Jacob Jaber encouraged customers to visit nearby locations, including a new branch opening soon in Lafayette, and confirmed the store’s intention to find a new location.

“We’re hoping we can find another place nearby where we can offer everything we want to,” Serpa said. “We haven’t found it yet but we’ve been looking for a while.”

Andrea Ali, the owner of Guerilla Cafe, a restaurant next door to Philz Coffee said the branch’s closing is a “hit-and-miss,” adding that Philz diverted coffee drinkers from her store, but customers who bought coffee from Philz would also order food from Guerilla Cafe.

Ali also criticized some of Philz Coffee’s business practices, claiming that the chain crowds smaller businesses.

“Philz has a habit of opening up next to small coffee shops, and I don’t think that’s a particularly fair practice,” Ali said.

Regular customers, however, expressed regret that the popular spot is closing. UC Berkeley graduate student Daniel Silversmith said the coffee shop was “great” not only for coffee but also for doing work, as well.

Ryan Knox, another regular customer, said he goes out of his way to visit the coffee shop and celebrated the “character” of the current location. Knox said he hopes Philz will open another location nearby.

Jaber, in his letter, called the Shattuck location “truly special,” saying the store’s opening marked the beginning of Philz Coffee’s East Bay community. He expressed gratitude for the customers of the Shattuck location.

“We’re deeply grateful to our loyal Shattuck customers who have allowed us to better days for the last eight years,” the letter said. “We’ll miss seeing you here, but look forward to serving you in a new spot.”