Black Spruce Sues CorpHousing Group For Nearly $1M In Unpaid Rent On Short-Term Rentals
Affiliates of apartment landlord Black Spruce Management have filed nine lawsuits alleging short-term rental provider CorpHousing Group has skipped out on nearly $1M of rent.
Black Spruce filed the suits in New York State Supreme Court this week, alleging that CorpHousing Group — a public company that rebranded as LuxUrban Hotels last month as it pivoted from leasing out apartments to leasing out and reopening shuttered hotels — failed to pay rent for months on units it leased.
Black Spruce is asking for a total of $932,238 across the nine suits, which name both CorpHousing Group and CEO Brian Ferdinand as the guarantor on the leases. The leases span 27 apartment units in total.
The properties named in the suits are multifamily buildings in the Manhattan neighborhoods of Little Italy, Chelsea and Lenox Hill, and in Brooklyn’s Greenpoint.
“We had surrendered and been released for these apartment units. The claim has no merit. They had reached out to try to get some additional money they had not been entitled to,” Ferdinand told Bisnow in an email. “We refused. We plan to litigate it.”
Five of the properties are owned by LLCs named after the property addresses, although records filed with New York’s Secretary of State show the LLCs are in the care of Black Spruce Management. The signatures of Black Spruce Chief Investment Officer Joshua Gottlieb or Chief Operating Officer Matthew Keller appear on the most recent deeds for the properties.
Neither Black Spruce nor the for the plaintiffs' attorneys responded to Bisnow’s requests for comment.
LuxUrban Hotels went public under its former name CorpHousing Group earlier this year, raising money to fund its pivot to a hotel operator. It has signed long-term, master leases for hotels in major markets, including the 217-room former W New York Downtown, the 167-key former Marriott Herald Square and the hotel in Lower Manhattan that was once the Ritz-Carlton, which was recently placed into bankruptcy.
CorpHousing Group was founded in 2017 and amassed a national portfolio of short-term rental units in apartment buildings, many of which were leased out under the SoBeNY branding.
Before going public, the company had been sued by dozens of plaintiffs in multiple states alleging the company hadn’t paid rent for short-term rental units, entire hotels, furniture it had leased or wages of its own employees, Bisnow previously reported.
Bisnow also spoke to multiple customers who said they had booked stays at CorpHousing Group properties, but were left chasing refunds for as long as a year after the company canceled their stays.
Ferdinand said in October that the company was exiting its leases in apartment buildings as it pivoted to the hotel sector, and that the customer cancellations were due to a technological glitch associated with "the wind-down" of its short-term rental business.
Black Spruce was founded in 2009. The company has acquired more than $225M of properties, representing more than 2,000 units, according to its website.
Black Spruce recently partnered with Orbach Affordable Housing Solutions to form GO Partners, which has aggressively acquired multifamily properties across New York City, becoming one of its most active multifamily investors over the past two years.