VaynerMedia sues co-working startup over unpaid rent

LedianSpace allegedly owes $269K for sublet at 373 PAS

373 Park Avenue South, interiors of LedianSpace and Gary Vaynerchuk (Credit: LedianSpace and Twitter)
373 Park Avenue South, interiors of LedianSpace and Gary Vaynerchuk (Credit: LedianSpace and Twitter)

Talk about a case of sour grapes.

VaynerMedia, the digital marketing agency founded by entrepreneur and wine fanatic Gary Vaynerchuk, is suing co-working startup LedianSpace, alleging its sublessee owes more than $250,000 in unpaid rent.

According to a complaint filed in New York State Supreme Court Thursday, LedianSpace signed a three-year sublease for VaynerMedia’s office at 373 Park Avenue South in September 2013. But the startup eventually fell behind on paying its nearly $42,000 monthly rent, the suit alleges.

In August 2016, the month the sublease was scheduled to end, VaynerMedia won a court judgment ordering LedianSpace to pay $255,553.32 in unpaid rent and other expenses via a $9,000-a-month payment plan, as well as August’s rent.

But according to the latest complaint, LedianSpace allegedly fell behind on those payments as well.

LedianSpace and an attorney representing VaynerMedia did not respond to requests for comment. It wasn’t immediately clear whether the co-working space, LedianSpace’s sole location, is still in operation after the sublease ended in August. According to GlobeSt, VaynerMedia signed a five-year, 8,700-square-foot lease at the 12-story building in 2011.

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Another co-working company, NeueHouse, occupies a full floor in the ATCO Properties & Management-owned building.

At of today, the startup’s website still advertises workspace at 373 PAS.

The number of co-working startups in New York City has ballooned in recent years, and competition is fierce. The area around Madison Square Park fields a particularly high concentration.

Co-working startups generally rent an office space long-term, divide it up into individual desks or rooms and rent them out to so-called members in return for monthly fees.

Some landlords have shied away from leasing to co-working companies, citing fickle demand from the startup crowd they depend on for some of their business.

VaynerMedia signed a 90,000-square-foot lease at Related Companies’ 10 Hudson Yards in 2014.