KSG Sued BroadRange For $11M Tenant Improvement Allowance

The owner of a Pennsylvania warehouse sued BroadRange Logistics, alleging the firm engaged in a scheme to defraud the property owner out of millions of dollars in tenant improvement funds.

KSG, the owner of a 600,000-square-foot warehouse in Mount Pocono, Pennsylvania, alleges it entered into a 20-year lease with BroadRange Logistics and agreed to provide $11 million in tenant improvement allowance. But the property owner, an entity led by Brooklyn-based Leah Weiss, alleges BroadRange never intended to make improvements and stopped paying rent.

The owner filed a lawsuit in New York state court in May seeking to collect on the $11 million plus other costs. BroadRange, a Georgia-based logistics company led by Ari Milstein which operates 21 warehouses across eight states, is facing at least two similar lawsuits in the past few months. One of the lawsuits alleges a similar pattern by BroadRange: the firm baits owners into agreeing to a lease and to take on loans with some of loan proceeds going toward tenant improvement funds. BroadRange then defaults on the rent and pockets the tenant improvement funds.

BroadRange has denied the allegations in court filings. BroadRange, Milstein and Malka did not respond to requests for comment.

According to the New York lawsuit, KSG purchased the Poconos warehouse in 2021 and leased it to NFI Industries, another logistics company. When NFI vacated the space in 2024, KSG put the property up for sale or lease. About a year later, a New Jersey-based investor named Josh Malka offered to buy the warehouse for $37 million. In June 2025, Malka through his company Winthrop Equities signed a contract of sale and agreed to pay a $575,000 down payment. But just a month later, Malka allegedly told the property owner he could not secure financing and backed out of the purchase, according to the lawsuit.

Malka offered the property owner an alternative plan. Malka allegedly agreed to introduce KSG to BroadRange — the tenant he planned to lease the space to — if KSG agreed to pay BroadRange a tenant improvement allowance up front, according to the lawsuit. KSG agreed to release Malka from their contract on the condition that BroadRange sign a lease prior to closing on a refinancing.

KSG and BroadRange negotiated a 20-year, triple-net lease under which BroadRange would pay rent, utilities, insurance, maintenance and taxes. In exchange, KSG agreed to provide BroadRange an $11 million tenant improvement allowance to renovate the space. In connection with the new lease agreement, KSG secured a $32 million commercial mortgage-backed securities loan from Ocean First Bank for the property with some of the loan proceeds funding the tenant improvement allowances. But KSG alleges that BroadRange misrepresented its financials and did not have the cash on hand to pay rent.

Just a month after signing the lease BroadRange allegedly defaulted on its rent payments. An accounting supervisor at BroadRange told a KSG representative in October 2025 that a rent wire would go out that Friday, but it never did. When pressed again, the accounting supervisor claimed the lease included six months of free rent. KSG claimed the free rent was never part of its agreement with BroadRange.

By the end of October 2025, KSG agreed to accept reduced rent payments for the next three months. In January, Broadrange failed to pay rent and claimed it could not obtain a certificate of occupancy because of issues with the building’s fire-suppression system. Later that month, a turnaround consultant hired by BroadRange told KSG the company was suffering cash-flow problems and working to address occupancy issues, according to the complaint. KSG grew concerned and declared the lease void in February because of BroadRange’s misrepresentations and demanded the tenant improvement allowance back, but BroadRange never returned it, the suit says.

KSG claims the tenant improvement funds were never spent on the property and BroadRange diverted at least a portion of the funds. Nine days after receiving the tenant improvement allowance, BroadRange wired nearly $2 million to Malka’s company, Winthrop Equities, as a commission fee, according to the lawsuit. KSG alleges that Malka had previously assured the landlord in writing that he would receive no more than $100,000 from BroadRange.

KSG said it would not have agreed to the allowance, or would have pushed for more due diligence, had it known about the larger commission. But BroadRange claims in its court filing that the lease agreement allowed it to use the tenant improvement allowance for “any other business purpose.”

KSG is suing BroadRange and Malka for fraudulent inducement, and BroadRange for unjust enrichment and breach of the implied covenant of good faith and fair dealing. It is also suing to void the payment to Malka as a fraudulent transfer under Georgia law.

The New York lawsuit also names attorney Rafael Berlin, as a defendant. KSG hired Berlin to negotiate the lease, but alleges he failed to include any mechanism in the lease to allow the landlord to recover the tenant improvement allowance if BroadRange broke its promises.

“These allegations against him have absolutely no merit,” said Rob Bergson of Abrams Garfinkel Margolis Bergson, who represents Berlin. “We plan to move to dismiss, and we have every confidence that the motion to dismiss will be granted.”

BroadRange is facing lawsuits from other property owners. In Colorado, a property owner recently sued BroadRange, alleging the company defaulted on two warehouse leases near Denver, and failed to return a $17.4 million discretionary allowance. In Texas, another property owner sued BroadRange, alleging the company repeatedly failed to pay rent on a lease for a 648,000-square-foot warehouse in Houston. The owner alleges BroadRange now owes over $44.8 million, most of which due to outstanding rent. BroadRange has denied the allegations in court filings.