WeWork sues former tenant over custom-built Chelsea office

Suit claims Lucky magazine publisher requested renovations but never paid

TRD NEW YORK /
Sep.September 28, 2015 05:45 PM

WeWork is suing the Lucky Group, a now-defunct media company behind Lucky magazine, for not paying rent on a custom-built office space in Chelsea, according to documents filed with the city Monday.




Behind the story:

WeWork

The suit alleges that the Lucky Group, a joint venture between Conde Nast and BeachMint launched last year, signed a 24-month membership agreement with WeWork in December 2014. As part of the deal, WeWork agreed to build the Lucky Group a custom office space at one of its locations, at 115 West 18th Street.

But the Lucky Group shuttered in June, and WeWork claims it got left with a useless space and no compensation.

“Because the subject office space was custom constructed and configured to conform to Lucky’s unique requirements, WeWork was unable to rent the space to another WeWork member and was required to renovate it,” the complaint reads.

The shared-office provider wants at least $470,000 in damages.

WeWork, founded in 2010 by Adam Neumann and Miguel McKelvey, leases office space and then effectively sublets desks or rooms to “members” on a month-to-month basis. Most WeWork shared offices have a similar design, but the company offers some customers the chance to design custom-built offices in exchange for a slightly longer-term commitment. For example, real estate tech startup Honest Buildings occupies a custom-built office at the WeWork outpost at 222 Broadway.

A large portion of WeWork’s customers are startups who value the flexibility of short-term leases. For the shared-office company, the risk of these startups folding makes it more difficult to plan ahead — as the lawsuit against the Lucky Group shows.

Representatives from Conde Nast, Lucky Group and WeWork could not be immediately reached for comment.


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