Clint Reilly Landmark Properties, owner of the Merchants Exchange Building in downtown San Francisco, filed suit against coworking provider Knotel and its owner Newmark in San Francisco Superior Court last month, alleging nonpayment of $7M in rent.

Knotel leases about 15K SF in the Merchants Exchange Building at 465 California St., according to a complaint filed by an entity related to Clint Reilly Landmark.

The landlord alleges in October Knotel “unceremoniously abandoned its premises with years left on the term and over $7 million in rent that remained to be paid.” Further, the complaint says Knotel “wrongfully diverted” funds derived from bonus rent payments to Newmark, which acquired Knotel in 2021.

Knotel signed a lease in 2019 that expires in 2027. Like many coworking providers, the pandemic caused financial problems for Knotel, leading to the company filing for bankruptcy in 2021, only to be swiftly snapped up by Newmark for a reported $70M.

Before its acquisition, Knotel was accused of skipping rent payments and was sued by landlords for the missed payments, according to The Real Deal.

Neither Knotel nor Newmark immediately responded to requests for comment Wednesday.

Clint Reilly Property told CoStar, which first reported the suit, it would “vigorously pursue all our legal remedies to be made whole on this lease.”