When it rains, it pours.
These aren’t the drops that seem to drench New York City nearly every afternoon this summer, but the lawsuits that are piling up against Knotel, claiming the flex-office company is skipping out on rent.
Since the beginning of July, at least four landlords have sued Knotel alleging the company owes a total of $1.6 million in unpaid rent, court records show.
The barrage of claims has accelerated in the past week, as the company has reportedly ceased paying rent at a number of locations while it works to shore up its balance sheet.
A spokesperson for Knotel said the company is “always evaluating and adjusting our portfolio to best meet the needs of our customers, through Covid-19 and beyond, and we have reached positive resolutions with many owners. We take our landlord relationships very seriously, and will continue to actively engage with them to achieve good outcomes during these challenging times.”
The largest rent bill due among the legal claims is at GFP Real Estate’s 40 Exchange Place in Lower Manhattan where the landlord alleges the short-term office company owes more than $740,000. In a lawsuit filed July 1, GFP says Knotel hasn’t paid rent since April.
Last week, investor David Berley’s UNG Realty filed a case against Knotel alleging it’s owed nearly $197,000 at 580 Eighth Avenue in the Garment District.
On Monday, landlord MJ Orbach filed two lawsuits claiming a total of nearly $342,000 owed at 250 West 30th Street and 260 West 39th Street in Midtown.
And on Tuesday, Hanover Estates filed a case alleging Knotel owes the landlord almost $351,000 at 41 West 25th Street in Nomad.
Short-term office companies have been hit hard by the coronavirus as members continue to work from home while landlords still demand rent.
Knotel is reportedly looking to return 20 percent of its portfolio to landlords, and has gone through at least two big rounds of layoffs this year.
The company is reportedly looking to raise $100 million in a funding round that would significantly lower its valuation. Knotel, currently valued at $1.6 billion, reportedly lost $223 million last year.
Contact Rich Bockmann at [email protected] or 908-415-5229.