The Collective Falls Into Administration
Coliving operator The Collective is poised to be broken up by its lenders after falling into administration following its failure to meet its liabilities, marking one of the most significant downfalls within the UK’s real estate industry.
Last week, The Collective fell into the UK version of a Chapter 11 bankruptcy after its reduced occupancy slowed the company’s income needed to fuel its pre-pandemic expansion.
Due to the low occupancy rate, the fee income also fell, forcing the company to raise more funding to pay the interest on its loans.
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Now, lenders are looking to sell off big portions of the company’s London and New York assets to take control of part of the portfolio. The administration will only impact The Collective’s assets in the UK, as the company’s U.S. assets are owned by separate entities.
Prior to its administration, The Collective was seen as a pilot of the coliving industry in the UK that had humble beginnings.
Founder Reza Merchant created the company as a brokerage for students seeking affordable shared living arrangements, eventually launching into one of the largest coliving operators in the area.
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