New Jersey-based co-living firm Outpost Club has snapped up a chunk of properties from failed rival Common Living, the latest example of consolidation in the once-crowded co-living industry.
After negotiations with the landlords that played out over the past few months, Outpost is in control of seven sites across New York that used to belong to Midtown-based Common, once the country’s largest provider but one whose debts became unsustainable and that is now seeking to sell off its assets after filing for chapter 7 bankruptcy protection.
And the eight-year-old Outpost is jockeying to grab an additional 10 Common sites by way of the liquidation process, which is now working its way through a federal Delaware bankruptcy court, an Outpost spokesman said.
Ultimately, Outpost looks to take over more than 60% of Common’s city portfolio, “dorms for adults” rental properties where unrelated tenants lease individual bedrooms and share an apartment’s common areas while receiving housekeeping and other services for below-market rents.
It’s not the first time that Outpost, whose CEO, Sergii Starostin, emigrated from Ukraine and lived with random roommates in his first New York homes, has grown through mergers. In 2019 Outpost picked up apartment buildings once controlled by failed provider Bedly, for instance.
Like Common, Outpost is not a property owner but manages buildings on behalf of landlords while providing furniture, housekeeping and security as well as utilities such as Wi-Fi for additional fees.
But Common got into trouble by outsourcing too many of those functions under a “growth at all costs” business model fueled by more than $100 million in venture capital funding, according to a statement from Outpost.
Common, which could not be reached for comment, has up to $10 million in assets but as much as $50 million in liabilities, according to a court filing. Critics also hammered the company in recent years with complaints about a lack of cleanliness at some properties and insufficient security.
Outpost, in contrast, “maintains in-house control over these critical areas, enabling them to manage expenses effectively,” the company’s statement said.
The seven properties once controlled by Common but whose owners now have contracts with Outpost are located in Manhattan, Queens and Brooklyn and contain about 350 units total.
Included on the list are a handful of sites in the Bedford-Stuyvesant neighborhood, such as 355 Tompkins Ave., a 4-story offering that’s owned by Edmund Soleymani, who purchased the prewar site in 2019 for $2.6 million, according to the city register. Rooms there rent for $1,500 a month and up, according to Outpost’s site.
Nearby is 151 Tompkins Ave., a similar-size property owned by Alberto Benamu, who acquired it in 2016 for $2.5 million. Benamu also owns the Common-turned-Outpost apartment building at 1287 Madison St. in Bushwick, which he bought for $2.02 million in 2016, records show.
The Manhattan offering in the group is five-story Harlem property 125 W. 138th St., which Albert Dweck purchased in 2020 for $6.3 million, according to the register.
As for the other 10 Common sites that Outpost seeks to put under its wing, the company said it could not comment on specific addresses while the receivership process plays out.
Landlords who switch to a co-living model can reap returns that are up to 30% higher than with typical apartment buildings, which often have a one-family-per-unit arrangement, according to Outpost, which reports $25 million in annual revenue.
But the sector, buffeted by the pandemic and stiff competition, has been beset by closures in recent years, including that of StarCity, Quarters and the Collective.
C. J. Hughes , 2024-06-10 19:24:59
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