British Co-Living Company Launching First U.S. Location In Long Island City
The Collective has paid $58M to acquire The Paper Factory Hotel in Long Island City, and will spend the next few months and millions of dollars converting it into a "short-stay co-living" facility, where guests will be able to stay up to 29 days and take advantage of the shared spaces and community programming that a co-living project entails.
While the deal closed Monday, The Collective has been working on it for months, CEO Reza Merchant told Bisnow Tuesday morning. Between the time The Collective made the decision to convert the hotel and when it closed on the purchase, Amazon announced, and retracted, plans for a 25,000-job headquarters in the neighborhood.
"We made the decision to do the deal long before the news [about Amazon] came out," Merchant said. "We’re really excited about the neighborhood. We like to be in areas that are culturally diverse, and Long Island City and Astoria is one of the most diverse parts of New York in terms of culture. ... We just believe in the area."
Merchant, a millennial CEO who runs the company out of London, said his company's core belief is to allow people to have a sense of community. It will do this in the space through food and beverage programming, exhibitions with visual artists and performances from musical acts.
While no one will be able to live in The Collective in Long Island City long-term, Merchant said it will still be co-living because of the way the space is designed and the culture imprinted there.
"What makes it is the sense of community and sense of belonging that is created, and having an environment where people can come there and achieve their full potential as people and human beings. That’s what makes co-living," Merchant said. "The length of stay is really a secondary point."
The Long Island City hotel is open now, but The Collective's full conversion is expected to launch this summer, although a specific opening date has not yet been set. With the $58M acquisition, The Collective has spent $150M on acquiring properties in Queens and Brooklyn, and by the time it builds out its three facilities, it will have spent close to $1B.
At 555 Broadway, at the border of Williamsburg and Bushwick, The Collective is building a $450M, 350K SF flagship co-living property after it acquired the land from Blesso Properties. It also acquired the former site of the Slave Theater in Bedford-Stuyvesant alongside Tower Holdings Group, with plans to convert the historic property into co-living. Those facilities should open in 2022 and 2021, respectively, Merchant said.
The Collective already operates the largest co-living facility in the world, The Collective Old Oak in London, and paid £125M to buy out its partner on that building last year. While Merchant said he can't disclose where else The Collective will open, it has dreams far beyond New York for its U.S. expansion.
"We’ve been able to create traction pretty quickly, and I really think that that is testament to just the culture of the U.S.," he said. "I find it an incredibly inspiring place to do business in. People embrace entrepreneurship and embrace hard work and dedication, so it’s been a real pleasure and very inspiring to build the business in the U.S. and get where we have. I see a very bright future for us. We’re really now putting our foot on the gas in terms of growth."
CORRECTION, MARCH 19, 6:10 P.M. ET: The Collective's property in Bedford-Stuyvesant is expected to open in 2021, and 555 Broadway is expected to open 2022. A previous version of this story misstated which facility would open when. This story has been updated.