Co-living company Collective – which went bankrupt last summer due to the pandemic – sold its 330,000 buildable square foot development site to 555 Broadway in Williamsburg, Brooklyn for $54 million, saving a lender from foreclosing the property’s mortgage.
While the cohousing society managed to repay some of its debt, it sold the vacant lot for much less than the $450 million for which she bought the property in 2018.
The buyers — a joint venture of The Loketch group, Joyland Group and Meral real estate group – are planning to build a mixed-use rental project on the site with 250,000 square feet of residential space under the Affordable New York program, which offers a tax incentive that allows developers to pay little or no property taxes on a development that includes affordable housing.
“This is a transit-focused site that allows us to meet a strong demand for premium rental apartments in Williamsburg,” Pinny Loketchfounder and director of The Loketch Group, said in a statement.
The UK-based The Collective used the off-market sale to repay its $49 million in mortgage debt on the property, The real deal reported for the first time. Its lender, the Kalikow family Gamma Real Estatewas ready to take the property, having scheduled an auction for the land next month. FTI Council has been appointed directors of the company’s bankruptcy in the UK in 2021, as The Collective’s lenders sought to liquidate the company’s US assets, All Work reported.
The lockdown and potential changes to the affordable New York program, known as 421a, have made it imperative to get things done quickly, TRD reported. Govt. Kathy Hochul slight changes proposed to the Affordable Housing Program, which will apply to the development unless the joint venture lays the foundation for the new building before the current 421a tax abatement expired June 15.
The new group of owners will immediately get to work laying the foundations and will not assume any debt on the property, JLLit is Ethan Stanton, a member of the team representing the buyers and the seller, told Commercial Observer. Buyers are looking for a construction loan to get started.
“555 Broadway not only offers scale, but a clear path to build under the Affordable New York program, which is why we were able to execute this entire transaction in less than 60 days,” Stanton said in a statement.
The Collective first revealed its intention to build its 500-unit flagship in New York at 555 Broadway in 2018, but the company’s occupancy rate declined during the pandemic and it facing bankruptcy in Britain, reported CO.
Along with Stanton, JLLit is Brendan Maddigan, Stephen Palmese, Ethan Stanton, Michael Mazara and Winfield Clifford represented the seller and the buyer in the transaction.
Celia Young can be contacted at [email protected].