Co-living startup The Collective to lose another Brooklyn development project
UCC auction for site of Bed-Stuy’s Slave Theater scheduled for Dec. 15
The former site of Brooklyn’s historic Slave Theater, once slated for a co-living facility designed by architect Sou Fujimoto, is headed to foreclosure.
Co-living startup The Collective has fallen behind on loan payments backed by its equity in the vacant one-acre property at 1215 Fulton Street in Bedford-Stuyvesant, according to a public notice.
An entity owned by Long-Island based lender Acres Capital has initiated a UCC foreclosure auction for the startup’s interest in the parcel, according to the notice, which did not specify the amount of the loan or how much The Collective allegedly owes. The auction is set for Dec. 15.
Acres declined to comment. The Collective, Mannion Auctions, which will be conducting the foreclosure auction, and Newmark’s Brock Cannon, who is handling the bidding process, did not respond to requests for comment.
Acres also provided The Collective with two mortgage loans backed by the property: A $26.7 million senior mortgage and a $4.4 million supplemental loan, according to public records. Both were issued in February 2019, when The Collective purchased the site for $32.5 million.
Founded by young entrepreneur Reza Merchant in 2010, the U.K.-based startup grew rapidly into a $1 billion dollar business, but struggled through a decline in occupancy during the pandemic. The company unsuccessfully sought a buyer before falling into administration — a legal protection similar to bankruptcy in the U.S. — in September, Bloomberg reported.
The vacant site formerly housed the historic Slave Theater, a movie theater that became a hub for civil rights activists, including Al Sharpton, in the 1980s and 1990s before it was demolished in 2016. Upon acquiring the property three years later, The Collective stated that it would honor the site’s history with its proposed 150-unit development, which was later enlarged to include 336 residential and hotel units, according to filings.
The Collective is also set to lose its 500-unit flagship development at 555 Broadway in Williamsburg after falling behind on its mortgage payments, according to sources.