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Sonder Holdings, a short-term rental company, announced plans to exit 80 properties across the U.S. and renegotiate reduced rents at another 25 locations, according to regulatory filings on Tuesday. The company also received a $10M capital infusion from a group of investors.

Of the 80 properties to be closed, 60—representing 2,300 units—have already shuttered, with the remaining 20 properties, totaling 3,200 units, expected to close by year-end. Termination fees for these closures are projected to be under $20M, resulting in savings exceeding $40M.

Sonder, headquartered in San Francisco, leases and operates properties—typically hotels and apartment buildings—as short-term rentals, utilizing an app for guest services. Despite rapid expansion, including into Europe, following its 2022 public listing via a special-purpose acquisition company, Sonder faced significant challenges in 2024.

In March, the company revealed that its financial statements for 2022 and 2023 were unreliable. Subsequently, it received a deficiency notice from the SEC for noncompliance with Nasdaq listing rules due to missing financial reports.

The company also conducted layoffs in February, reducing 17% of its corporate workforce. Recently, the owner of a 125-key Sonder property in Downtown Los Angeles defaulted on a $56M loan, with the status of this property remaining uncertain. Despite these setbacks, Sonder continues to accept reservations at its existing locations.

Original article posted on June 11, 2024