Olmstead Sues Former Breather Exec Over Back Rent at Flatiron District Office
By Celia Young August 12, 2022 1:00 pmreprints
Olmstead Properties sued a former executive of the flexible workspace provider Breather for allegedly failing to pay more than $304,000 in rent for Breather’s Flatiron District office space.
Olmstead filed a lawsuit against Patrick McCormick, Breather’s former New York City general manager and later vice president of experience, in New York County Supreme Court Thursday, alleging he hasn’t paid two years’ worth of rent on Breather’s sixth-floor space at 54 West 21st Street. Olmstead, which manages the 12-story property for Rosen Equities, claimed McCormick is on the hook for the cash as Breather’s personal guarantor, even though coworking company Industrious bought Breather last year for around $3 million.
Breather signed a six-year lease for the office in 2017, one of the more than 350 Breather locations across the United States, Great Britain and Canada at the time. It’s unclear how large Breather’s space was, but Rosen Equities lists the property’s available floor plates as anywhere from 557 square feet to 6,400 square feet.
The Montreal-based Breather was founded in 2012 as a service renting offices by the hour. Breather started a rapid expansion abroad in 2017, and by 2019 had inked deals with big names such as Apple, Google and the Royal Bank of Canada. After WeWork’s disastrous initial public offering attempt in 2019, investor demand for flexible workspace providers dried up just as Breather was looking for new funding, The Globe and Mail reported.
Breather’s luck soured again when the pandemic hit. The company furloughed and then laid off the majority of its staff and closed its 400 locations worldwide as COVID-19 emptied office districts. Breather had been running low on cash before the pandemic began, partly because it overpaid for leasing space to remain competitive with WeWork and Knotel, a former employee told CO in 2020.
Breather is no stranger to lawsuits, though previous cases pursued the coworking company, not its former executives.
IGS Realty sued Breather in December 2020, alleging that Breather owed nearly $91,000 in unpaid rent for its 336 West 37th Street outpost. Pink Stone Capital followed suit that same month, claiming Breather hadn’t paid rent on its two-floor SoHo space at 54 Thompson Street for five months. A judge ordered Breather to pay IGS Realty last year, but the Pink Stone case remains open, according to court records.
McCormick, Industrious and attorneys for Olmstead did not immediately respond to requests for comment.
Celia Young can be reached at email@example.com.