The Loketch Group, the Joyland Group and Meral Property Group secured the capital from Slate Property Group’s lending arm, SCALE Lending, to finance the acquisition and construction of 555 Broadway.
The deal had to come together quickly as The Collective, a U.K.-based co-living developer, was under pressure to sell the site before a foreclosure auction scheduled for next month.
Slate principal Martin Nussbaum said his firm “clos[ed] rapidly on this loan so that the borrower could move quickly on their acquisition.”
The new owners purchased the property last week for $54 million.
They plan a 330,000-square-foot development that will set aside income-restricted units under the Affordable New York program, better known as 421a.
Loketch Group founder Pinny Loketch said in a statement that the “transit-oriented site … enables us to accommodate strong demand for superior-quality rental apartments in Williamsburg.”
The Collective, founded in 2010 by Reza Merchant, went into bankruptcy over the summer as a result of the Covid pandemic. Occupancy levels at its co-living locations dropped and the pandemic forced delays at its pipeline of projects.
The company’s net loss of 9.9 million pounds in 2019 jumped to 35.9 million in 2020, according to a report by FTI consultants, which have been appointed administrators of the company’s U.K. bankruptcy.
The Collective owns another Brooklyn development site, in Bedford-Stuyvesant. It is also facing foreclosure.
Meridian Capital Group’s Morris Betesh and Alex Bailkin arranged the financing for the the Loketch-led investors.