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Co-Living Firm Common To Shutter After Aggressive Expansion Ends In Bankruptcy

Common Living, one of the largest co-living firms in the country, is shutting down.

The Common Perry apartment building in the Brookland neighborhood of Washington, D.C.

The firm, which had been growing during the pandemic through acquisitions of failed co-living companies, filed for Chapter 7 bankruptcy late Friday, indicating its plans to liquidate assets and cease operations. 

The filing in the U.S. Bankruptcy Court for the District of Delaware says Common has an estimated $1M to $10M in assets and $10M to $50M in liabilities. The company indicated it had at least 200 creditors but fewer than 1,000 entities that could have a claim against it. 

Common, founded in New York by Brad Hargreaves in 2015, aggressively expanded its portfolio from 2,000 to 7,000 units between 2020 and 2022. Common's U.S. portfolio consists of 5,200 units in 12 cities, according to its website. 

Common helped pioneer the co-living model, a strategy that involves buying or developing apartment assets or entering into management agreements with multifamily landlords, then leasing out individual bedrooms rather than entire units. 

January 2023 merger with Habyt, which operated in Europe and Asia, pushed the company into the European market and increased the merged entity's total portfolio to more than 30,000 units across 40 cities.

Berlin-based Habyt, led by founder and CEO Luca Bovone, became the parent company for Common as part of the acquisition. Bovone is listed as Common Living's manager on its Chapter 7 bankruptcy petition. 

“It is with a heavy heart that we announce the closure of Common,” Bovone said in a statement to Bisnow. “This decision, although not what we had hoped for, will make the remainder of the Habyt group more financially agile, with greater capacity to accelerate growth and generate value.”

Habyt will continue to operate in Europe and Asia as well as a “small number” of U.S. properties, Bovone confirmed. He said the liquidation of Common will result in Habyt being a profitable company.

“The company will focus on its core strengths and streamline operations,” Bovone wrote. 

The bankruptcy was related to the structure of Common's contracts and business model, Bovone told Bloomberg. But he said the company had been under increased pressure from interest rates and tightening margins as operating costs have risen.

Common raised at least $136M in venture capital before the end of 2022 and has roughly 130 employees. 

Hargreaves, the firm’s chairman, and a spokesperson for the company didn't immediately respond to a request for comment, nor did Daniel Astin, an attorney at Delaware-based law firm Ciardi Ciardi & Astin who is representing Common in the bankruptcy. 

Hargreaves stepped down as CEO in August 2022 after leading a rapid expansion of the company during the pandemic, taking over more than 2,000 units from other property managers between 2021 and early 2022.

Its June 2021 acquisition of Starcity — which added 1,000 units in California, New York and Barcelona — helped push Common’s portfolio to more than 5,000 units by mid-2022. Starcity had previously taken over failed co-living startup Ollie. 

Common was growing its footprint as the pandemic sapped demand for shared apartments, as renters instantly grew wary of sharing small living quarters with strangers.

The Collective, a London-based co-living firm that built a nearly 100,000-unit portfolio, was among the highest-profile victims. It filed for bankruptcy in September 2021 and sold off assets to pay back creditors.

Quarters, a German co-living firm with properties in Chicago, New York and D.C., filed for Chapter 7 liquidation in January 2021.

Common executives argued at the time that their focus on management agreements over master leases gave it the flexibility to thrive even as its competitors struggled with pandemic shifts in leasing habits. 

Tenants at co-living properties like Common’s typically rented a private bedroom in a suite with shared areas like living rooms, kitchens and bathrooms. 

The model can be a way to increase affordable housing options amid skyrocketing rental costs, but tenants at Common properties told The Daily Beast in 2022 that poor communication, substandard common area maintenance and lax security led to uncomfortable and unsafe living conditions. 

Hargreaves was replaced by Karlene Holloman, the firm’s then-vice president of property management and the former CEO of Point Hospitality Group. 

Holloman is still listed as the CEO on Common’s website, but she left the role at the end of the year to become chief operating officer at Wander, a luxury vacation home rental service.  

Bianca Barragán contributed reporting. 

UPDATE, JUNE 3, 12:20 P.M. ET: This story has been updated to include additional context and comments from Habyt CEO Luca Bovone.

CORRECTION, JUNE 3, 3:40 P.M. ET: A previous version of this story misidentified some of Common's investors. The story has been updated.