A disgruntled landlord is suing hospitality startup, Sonder, for $103 million. Natha Berman’s MetroLoft Management wants Sonder out of its office-to-residential conversion at 20 Broad Street, pay its back rent of $3.9 million, and pay the over $100 million remainder of its lease. The landlord’s reason? Sonder hasn’t paid rent since last month.
Sonder’s response was that it had ceased operations in that location in May due to a Legionella outbreak. A Sonder spokesperson said that Sonder had “not found the owner’s approach to remediation and long-term water management issues at the building acceptable.”
A MetroLoft spokesperson says the company is sympathetic to the issues the short-term sector is facing in the current market climate and is willing to work with Sonder to find a mutually beneficial solution.
Unfortunately, Sonder did not assuage. The MetroLoft spokesperson said:
“Instead Sonder has chosen the opportunistic route and decided to abandon its lease and use other circumstances as a pretext for vacating the property entirely. This will not stand and we strongly believe the courts will find in favor of the merit of the landlord’s position.”
May brought bountiful money to the startup. It ran a funding round and raised $150 million from investors. It claims the move was not a “coronavirus bailout” and the startup has even rehired and restored hours for 100 employees.