Industrious Owes Stockbridge $2.3M For Abandoning Lease
Office landlords across Chicago just tallied a win, as a Cook County judge ruled that co-working company Industrious owes its former West Loop landlord more than $2.3 million for walking out on its lease.
The landlord, Stockbridge Capital Group, filed the lawsuit in 2020, alleging that Industrious stopped paying rent for its space at 600 West Jackson Boulevard in April 2020 and was abandoning the $4 million it owed for a lease that runs until 2030, Crain’s reported.
Industrious pushed back against the complaint, claiming the companies that operate within its provided co-working space are responsible for the lease. Industrious said its venture, dubbed Industrious Chi 600 West Jackson LLC, no longer had any assets and offered a $14,000 settlement to Stockbridge, according to the lawsuit.
On May 12, Cook County Judge Mary Colleen Roberts ruled that Industrious committed fraud, breach of contract and violated the Illinois Uniform Fraudulent Transfer Act. She required the Jamie Hodari-led company to pay more than $1.6 million in damages and $735,000 in attorney’s fees to Stockbridge, whose executive team includes Terry Fancher and Sol Raso.
Co-working space providers have gained popularity amid pandemic-fueled struggles of office buildings. Their plug-and-play styled offices are well suited for hybrid-work scenarios, while being cost-friendly compared to a traditional office layout.
Stockbridge later sold the building to the Farbman Group for $11 million, a discount from Stockbridge’s 2014 purchase price of $24 million.
Roberts’ ruling could be a sign that more co-working companies will be on the hook for outstanding balances — a topic that’s been at the forefront of Chicago’s office sector given the number of similar scenarios.
In April, German investor Commerz Real AG filed a lawsuit against WeWork, seeking $360,000 in rent and other damages from the co-working firm regarding its lease at 125 South Clark Street, which runs through 2033. WeWork likewise claimed that the companies utilizing its space are responsible for rent payments.
— Quinn Donoghue
