Vornado Sues Times Square Retailer Claiming It Owes More Than $1M In Skipped Rent
The steady stream of commercial real estate lawsuits continues to flow, with Vornado the latest to take aim by suing a tenant at one of the most prominent retail buildings in Times Square.
The real estate investment trust is taking action against the U.S. Polo Association, claiming it owes more than $1.1M in unpaid rent for space at 1540 Broadway. In a lawsuit filed Wednesday in the New York Supreme Court, lawyers for Vornado say the apparel retailer, which runs a store that opens directly onto Times Square, hasn't paid rent since March.
Vornado said it notified the tenant that it was in default of its lease, and is asking a New York State Supreme Court judge to force U.S. Polo to clear the premises and hand over the keys to its space, which covers portions of the ground floor, mezzanine level and fourth floor of the nearly 200K SF building, according to the suit.
U.S. Polo signed a lease for the space in 2013, per court papers, which was set to expire in 2023. However, from April 1 through June 1 this year, it failed to pay any rent — racking up a debt of just over $854K over that period, Vornado claims. In June, the firm issued U.S. Polo with a lease default, requesting full payment within a few weeks. But U.S. Polo, per Vornado, failed to pay any of the back rent and did not meet any of its ongoing rent obligations, even after receiving the lease default notice.
Last month, the landlord told U.S. Polo it was terminating the lease and wanted it out by Aug. 4. But, as Vornado further alleges, U.S. Polo has stayed put and continued to skip its rent payments. U.S. Polo disputes whether or not the lease has actually been terminated, per the suit.
The retailer still lists the store as one of its active locations on its website, although calls to the store's listed phone number went unanswered Wednesday. U.S. Polo redesigned the store last year into a new experiential concept it was rolling out as part of an aggressive expansion that, at the time, targeted opening 100 new stores this year, WWD reported.
In total, Vornado claims U.S. Polo is on the hook for nearly $1.2M in rent through Aug. 4. Between Aug. 4 and 31, Vornado claims rent owed will hit $373K, and starting Sept. 1 rent will reach nearly $429K per month. It also claims U.S. Polo owes it for costs relating to brokerage commissions, legal fees and expenses of preparing the site for reletting.
A slew of lawsuits have hit the courts across the country, as landlords and their commercial tenants reel from the impact of the pandemic crisis.
Multiple landlords across assets classes are claiming their tenants owe money for months of unpaid rent. Tenants are suing the landlords, too, with multiple big-name players like the Gap, Victoria's Secret and Valentino arguing they should not have to pay rent because government orders forced them to close their stores.