Co-living startup The Collective is set to lose its flagship shared-living development project as the pandemic takes its toll on the $1 billion company’s business.
The U.K.-based company is behind on the $49 million mortgage for its Williamsburg development site at 555 Broadway, where the firm had planned to build a 500-apartment tower, according to a source familiar with the matter.
The lender on the site, the Kalikow family’s Gamma Real Estate, has hired a team at Cushman & Wakefield led by Dan O’Brien and Adam Spies to market the loan for sale to a buyer that could take control of the property.
A spokesperson for The Collective said the company is “considering a number of options to take the project forward.”
A representative for Gamma did not immediately respond to requests for comment.
The Collective, founded by Reza Merchant in 2010, is on the brink of bankruptcy, according to a report from React News via Bisnow. The struggling company hired Credit Suisse in June to pursue a potential sale but The Collective didn’t find any takers and is burning cash.
The Collective hired FTI Consulting to guide it through administration, a process similar to bankruptcy for entities in the U.K., the outlet reported.
The company owns a co-living outpost in Long Island City at the Paper Factory and previously announced plans for others on North 8th Street in Williamsburg and one in Bedford-Stuyvesant.
But the Williamsburg location near Broadway Triangle was to be the largest property in its portfolio. The Collective bought the site for $25.5 million in 2018 and earlier this year released renderings for a 28-story building designed by ODA New York with a price tag of $450 million.
The plan called for 500 apartments — a mix of traditional rentals and short-stay rooms — as well as shared office space, retail, community facilities and amenities including a rooftop pool.
However, the co-living business was hit hard by the pandemic and The Collective’s mortgage on its development site matured in July after the borrower negotiated an extension with Gamma earlier this year.
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