Landlords sue hospitality stalwart Furnished Quarters

Short-term rental provider faces several lawsuits

From left: Furnished Quarters' Steven (left) and Gary Brown with 315 West 33rd Street (left) and 158 West 27th Street (Furnished Quarters, CityRealty, CityFeet)
From left: Furnished Quarters' Steven (left) and Gary Brown with 315 West 33rd Street (left) and 158 West 27th Street (Furnished Quarters, CityRealty, CityFeet)

Furnished Quarters, a short-term rental company that predates Airbnb by a decade, is facing legal challenges.

Four landlords have sued the company this year for a total of $1.75 million, representing a mix of alleged rental arrears as well as accelerated damages and attorney fees, according to court filings.

AFIAA filed a lawsuit against Furnished Quarters last week for more than $1 million dollars, claiming the company has not paid rent at its Chelsea headquarters since March 2020.

The hospitality company is on the hook for $102,720 per month at its 19,300-square-foot office at 158 West 27th Street, and owes its landlord $1,161,505 after failing to cure a default notice it received in January, according to the complaint.

AFIAA says it drew down all $500,000 of a line of credit and sapped a security deposit of more than $100,000 to pay overdue rent. The landlord is seeking approximately $500,000 in holdover charges, alleging that Furnished Quarters overstayed its lease, although it does not ask the court to evict the company. The firm did not respond to a request for comment.

Furnished Quarters co-founder Gary Brown said the company has more than 100 landlords and that the lawsuits represent a fraction of its overall business.

“Negotiations for office space are a different ball game [than for hospitality space], and like every company right now, we are working out how much office space we’ll need in the future,” Brown said.

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Other landlords have also sought to collect from the company. In February, the landlord of 30 Park Avenue sued Furnished Quarters for $138,000 in accelerated rent for 10 units the company leases. The lawsuit was filed by limited liability company Thor 30 Park Avenue, which has a registered address belonging to Cammeby’s Management. The company owns a large stake in the building. The LLC is represented by Evan Nahins of the law firm Borah Goldstein.

In March, Brookfield Premier Real Estate Partners sued for $367,000 at 315 West 33rd Street. Furnished Quarters leases 29 units at the building, with some arrears dating back to 2019, the landlord alleged, though it is not seeking to evict the company. Brookfield Asset Management, which filed the lawsuit via the limited liability company 33/34 West Owner, purchased the building from SL Green in February 2020 for $447 million.

Brookfield, also represented by Nahins, described the litigation as “ongoing” and declined further comment. Brown said the dispute was nearly resolved.

And in April, Furnished Quarters was sued by its landlord at 115 West 27th Street, where it leased space for $10,000 per month, for $150,000 in rental arrears. Attorneys for the landlord, 115 W. 27th Street Associates LLC, did not return a request for comment.

Industry observers say it will take years for the hotel market to recover in New York City, and that medium- and longer-stay offerings have proven more resilient through the pandemic. Furnished Quarters requires guests to book a minimum of 30 days.

“We are already back to 2019 occupancy levels and basically sold out for the summer,” said Brown.