Short-term rental company Sonder Holdings will leave 80 properties across the country and has negotiated reduced rents at another 25 locations, the company said in regulatory filings Tuesday.
The company has also received a $10M infusion of capital from a group of investors, according to a release.
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Of the 80 locations that will no longer operate as Sonder outposts, 60 properties representing 2,300 units have already shuttered, the company said. The remaining sites are expected to close by the end of the year for a total of 3,200 units.
Termination fees associated with closing the locations are expected to total less than $20M and lead to savings of more than $40M, the company said.
San Francisco-based Sonder didn't disclose the locations of the buildings and didn't immediately respond to a request for comment and more information. The company had 12,200 units globally at the end of 2023. It had 16,000 units in its portfolio, counting those not yet available for rent.
Sonder leases properties, usually hotels and apartment buildings, with historic and adaptive reuse thrown in, then operates them as short-term rentals. Guests use an app to check in or make service requests. The model is pitched as a way to cut risk and lease-up time for owners while reducing the overhead that comes with a traditional hotel.
The company went public via a special-purpose acquisition company in 2022, quickly announcing an expansion, including into Europe.
But Sonder has had a rough 2024. In March, the company disclosed that its financial statements for fiscal years 2022 and 2023 were unreliable, the San Francisco Business Times reported.
At that time, the company hadn't reported its fourth-quarter or full-year financial results for 2023, but it planned to do so "as soon as practicable," according to the SFBT. On May 17, the company received a notification of deficiency from the Securities and Exchange Commission indicating noncompliance with Nasdaq listing rules over the missing quarterly report.
Sonder also underwent a round of layoffs in February, letting go of 106 employees, or 17% of its corporate workforce, according to an SEC filing.
Last week, the owner of a 125-key Sonder property in Downtown Los Angeles defaulted on the building's loan of more than $56M. It is unclear if the Sonder there is slated to shutter, though the company's website is still accepting reservations for the property.
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