Bankrupt cohousing company The Collective sold its Williamsburg development site for $54 million, helping it avoid foreclosure and even withdraw a small amount of cash.
A joint venture of Loketch Group, Joyland Group and Meral Property Group purchased the site at 555 Broadway. The Collective had planned to build a 500-unit building there.
The cohabitation company, currently under the control of a receiver in the UK, used the proceeds of the sale to pay off a $49 million mortgage held by the Kalikow family’s Gamma Real Estate, which had planned a sale to the foreclosure auctions for the property next month.
Loketch Group founder Pinny Loketch said in a statement that “the transit-focused site…allows us to meet a strong demand for premium rental apartments in Williamsburg.”
A representative for The Collective could not immediately be reached.
The site, near Broadway Triangle, has approximately 330,000 buildable square feet and any eligible project would qualify for the New York Affordable Property Tax exemption.
The deal was a bit complicated, as buyers needed to move quickly so The Collective could pay Gamma back before the foreclosure auction.
JLL’s Ethan Stanton, who led a team of brokers who brokered the deal, said the tax program created a “clear path to build” that helped both parties close the deal in less than 60 days. . A foundation must be laid before the program expires on June 15 to qualify for the 35-year tax relief; permits are in place.
The Collective, founded in 2010 by Reza Merchant, went bankrupt this summer following the Covid pandemic. Occupancy levels at its co-housing venues have plummeted and the pandemic has forced delays in its pipeline of projects.
The company’s net loss of 9.9 million pounds in 2019 rose to 35.9 million in 2020, according to a report from consultants FTI, who were appointed bankruptcy trustees of the company in the UK.
The Collective has another Brooklyn development site in Bed-Stuy. He is also facing foreclosure.