What’s going on:
A court ruling found that New York-based coworking company Industrious owes its former landlord, Stockbridge Capital Group, more than $2.3 million, according to The Real Deal.
The court ruling, which took place in Cook County, Illinois, related to the financial obligations of a Chicago lease. The lawsuit stems back from 2020, when Stockbridge Capital Group alleged that Industrious stopped paying the rent on an office space located at 600 West Jackson Boulevard. Industrious claimed that it no longer had any assets and offered a $14,000 settlement to Stockbridge.
The Real Deal Reports that the judge ruled on May 12 that Industrious had committed a breach of contract, committed fraud, and violated the Illinois Uniform Fraudulent Transfer Act. Industrious was ordered to pay more than $1.6 million in damages and $735,000 in attorney’s fees to Stockbridge.
Why it matters:
The court ruling may set a precedent for other co-working companies to be held accountable for outstanding balances. The issue has reportedly been a significant concern in Chicago’s commercial office sector due to a handful of other similar scenarios.
How it’ll impact the future:
With all the economic factors that are influencing a post-pandemic world, many businesses are reconsidering their traditional office leases in the evolving commercial office sector. Co-working space providers have become more and more popular, offering solutions for businesses that are embracing hybrid-work environments.
This trend is causing many co-working space providers to review their financial and legal obligations towards their own leasing agreements. Landlords and co-working companies would be wise to foster open communication and mutual understanding to sidestep any potential disputes and legal entanglements.