{"id":378099,"date":"2025-11-14T10:23:36","date_gmt":"2025-11-14T10:23:36","guid":{"rendered":"https:\/\/www.europesays.com\/us\/378099\/"},"modified":"2025-11-14T10:23:36","modified_gmt":"2025-11-14T10:23:36","slug":"sonder-sued-by-2-nyc-landlords-over-chaos-caused-by-collapse","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/378099\/","title":{"rendered":"Sonder Sued By 2 NYC Landlords Over ‘Chaos’ Caused By Collapse"},"content":{"rendered":"

When hospitality firm\u00a0Sonder abruptly closed\u00a0on Monday<\/a>\u00a0after Marriott International terminated its\u00a0licensing deal, guests staying at Sonder properties were told to check out immediately and find alternate accommodations.<\/p>\n

What followed was nothing short of \u201cchaos,\u201d with guests refusing to leave and building owners scrambling to secure their properties, according to a lawsuit filed Wednesday by two of Sonder’s New York City landlords.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n The Sonder hotel at 2 Washington St. is one of more than 100 across the country the hospitality chain abruptly closed on Monday.\n <\/p>\n

The owners of 2 Washington St. in Battery Park and\u00a037 W. 24th St. in the Flatiron District<\/a> sued three Sonder affiliates, claiming the San Francisco-based chain indicated it plans to breach its lease contract and asking a New York state judge to grant an injunction that gives the landlords back control of the properties.<\/p>\n

The Moinian Group<\/a>, run by Joseph Moinian<\/a>, owns 2 Washington, while Fortuna Realty Group<\/a>, run by Joseph Moinian’s younger brother, Morris, owns 37 W. 24th. Each landlord is seeking at least $10M in damages from Sonder, claiming it violated New York law with its abrupt exit from the buildings.<\/p>\n

\u201cAs a result of the Defendants\u2019 arbitrary and sudden action, chaos has ensued at the Properties, with certain tenants refusing to leave the Properties despite conditions which may compromise the safety of individuals and the Properties,\u201d the lawsuit states. \u201cIn addition, guests and tenants have been left without a place to stay and without access to their belongings.\u201d<\/p>\n

Marriott announced Sunday that it had terminated its partnership with Sonder, which was integrated last year into the Marriott Bonvoy platform.<\/p>\n

The world’s largest hotel chain emailed guests who had booked rooms at Sonder buildings that\u00a0they needed to vacate<\/a> and find alternative accommodations.<\/p>\n

The next day, Sonder announced it\u00a0would immediately shut down and seek to file for liquidation through the Chapter 7 bankruptcy process.\u00a0As of Wednesday night, no filing had appeared in federal court records.<\/p>\n

\u201cWe are devastated to reach a point where a liquidation is the only viable path forward,\u201d\u00a0Sonder interim CEO\u00a0Janice Sears said in a statement. \u201cWe explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.\u201d<\/p>\n

Sonder was founded in 2012 and built a business leasing apartment buildings and hotels and running them as fully furnished short-term rentals. The company raised $600M in venture capital and went public in 2022 at\u00a0a $1.9B valuation<\/a>.\u00a0<\/p>\n

It scaled quickly, eventually growing to a portfolio of 12,000 rooms in more than 40 countries, but profits never followed.<\/p>\n

It lost\u00a0more than $200M<\/a> in each of the\u00a0past five years<\/a>. Last year, it told investors it planned to shutter more than a quarter of its portfolio after\u00a0disclosing that its financial statements going back more than a year couldn’t be relied upon, resulting in multiple class-action lawsuits.\u00a0\u00a0<\/p>\n

Amid those challenges, it\u00a0struck a deal with Marriott<\/a> to bring Sonder into\u00a0the Marriott Bonvoy booking platform, which\u00a0also came with some financial breathing room. The integration of Sonder into Marriott didn’t go according to plan, however.<\/p>\n

\u201cUnfortunately, our integration with Marriott International<\/a> was substantially delayed due to unexpected challenges in aligning our technology frameworks, resulting in significant, unanticipated integration costs, as well as a sharp decline in revenue arising from Sonder\u2019s participation in Marriott\u2019s Bonvoy reservation system,\u201d Sears said. \u201cThese issues persisted and contributed to a substantial and material loss in working capital.\u201d<\/p>\n

Those issues don’t allow the company to break its lease and strand its customers, the landlords claim in\u00a0their lawsuit. Sonder signed a 10-year lease at 2 Washington in January\u00a02020 and at 27 W. 34th St. in December 2021, according to the suit.<\/p>\n

At each building, the landlord claims\u00a0it is\u00a0owed no less than $10M based on the remaining rent due on the leases. Sonder is also obligated to\u00a0mitigate damages to the landlord and the property\u00a0in the event that it defaults on its lease, according to the suit.<\/p>\n

\u201cIf not immediately addressed, such safety issues, impairment of ability to mitigate damages, and damages to the Properties may quickly escalate exponentially,\u201d the lawsuit says.<\/p>\n

The Moinians are seeking permission to terminate Sonder’s leases and take immediate control of their respective buildings.<\/p>\n

Spokespeople for Sonder and the Moinian Group didn’t respond to\u00a0Bisnow’s requests for comment. Attorneys for the landlords declined to comment.<\/p>\n","protected":false},"excerpt":{"rendered":"When hospitality firm\u00a0Sonder abruptly closed\u00a0on Monday\u00a0after Marriott International terminated its\u00a0licensing deal, guests staying at Sonder properties were told…\n","protected":false},"author":3,"featured_media":378100,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5122],"tags":[5229,181528,181529,181530,405,403,5226,5225,5228,5227,181325,181531,67,586,132,5230,68,2969],"class_list":{"0":"post-378099","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york","8":"tag-america","9":"tag-joe-moinian","10":"tag-moinian-group","11":"tag-morris-moinian","12":"tag-new-york","13":"tag-new-york-city","14":"tag-newyork","15":"tag-newyorkcity","16":"tag-ny","17":"tag-nyc","18":"tag-sonder","19":"tag-sonder-holdings","20":"tag-united-states","21":"tag-united-states-of-america","22":"tag-unitedstates","23":"tag-unitedstatesofamerica","24":"tag-us","25":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115547564445345145","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/378099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=378099"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/378099\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/378100"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=378099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=378099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=378099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}