“Clamping down on any and all payments”: Knotel misses rent as financial issues mount

Pandemic intensified existing financial issues at flexible-office company

TRD New York /
Apr.April 09, 2020 09:05 AM
Knotel CEO Amol Sarva with 40 Exchange Place, 61 Broadway and 5-9 Union Square West (Credit: Sarva by Sasha Maslov)

Knotel CEO Amol Sarva with 40 Exchange Place, 61 Broadway and 5-9 Union Square West (Credit: Sarva by Sasha Maslov)

 

Flexible-office company Knotel has reportedly stopped paying rent at several of its New York locations as it struggles with mounting financial issues.

The company has recently taken drastic steps to cut costs, and last month laid off or furloughed half its 400-person staff. However according to Business Insider, the company has a backlog of payments that goes back many months before the pandemic, putting it in a precarious position as the economy falters.

Knotel is behind on payments to some of its key partners, according to Business Insider, including brokerage firms CBRE and Cushman & Wakefield. It has also reportedly failed to pay April’s rent for locations including 61 Broadway, 40 Exchange Place and 5-9 Union Square West.

Ivy Chiou, a spokeswoman for Knotel, said in a statement that the company was “focused on balancing the interests of customers, partners, and investors, in efforts to build a sustainable, long-term business,” and was “taking these steps to ensure we are well-positioned for both current times of great crisis, as well as when business returns to a new normal.”

The company is also planning to return about 20 percent of its portfolio to landlords, according to Commercial Observer. The company framed the arrangement — to shed about 1 million square feet of office space — as a “business deal.”

Knotel in Talks to Give Back 20 Percent of Its Portfolio

Knotel is one of several office-space companies to recently lay off staff in recent weeks. Earlier this month, Industrious laid off 90 employees. WeWork also laid off 250 employees at the end of March. [Business Insider] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
WeWork CEO Sandeep Mathrani (Getty; iStock)

We Company changes name back to WeWork

We Company changes name back to WeWork
1000 Dean Street with Jamie Hodari and Asher Abehsera (Google Maps)

Industrious expands with 21K-sf space in Crown Heights

Industrious expands with 21K-sf space in Crown Heights
331 Park Avenue South (Google Maps)

Investors accuse Prodigy Network of fraud at troubled Park Ave development

Investors accuse Prodigy Network of fraud at troubled Park Ave development
Cushman & Wakefield CEO Brett White and Industrious CEO Jamie Hodari (Industrious; Cushman)

Cushman partners with Industrious in bid to bring the office back

Cushman partners with Industrious in bid to bring the office back
Amol Sarva and 110 William Street (Google Maps)

Knotel wants out at 10 Manhattan locations

Knotel wants out at 10 Manhattan locations
WeWork CFO Benjamin Dunham and Kimberly Ross (LinkedIn)

WeWork shakes up chief finance post

WeWork shakes up chief finance post
Macerich posts $27M loss; CEO touts brick-and-mortar retail

Macerich posts $27M loss; CEO touts brick-and-mortar retail

Macerich posts $27M loss; CEO touts brick-and-mortar retail
Sandeep Mathrani (WeWork, iStock)

WeWork offers pay-as-you-go workspaces

WeWork offers pay-as-you-go workspaces
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...