Quarters, the “WeWork of co-living,” files for bankruptcy
10 affiliates of the company filed for Chapter 7 on Friday
Quarters’ U.S. expansion appears to have ended in bankruptcy.
Eight properties and two additional limited liability companies tied to the German co-living firm filed for Chapter 7 bankruptcy on Friday, according to court records. Under Chapter 7 bankruptcy, companies cease operation and liquidate all eligible assets to repay creditors.
Quarters, which is the co-living brand of Berlin-based Medici Living Group, raised $300 million for its push into the U.S. in early 2019. That came on the heels of raising $1.4 billion to expand in Europe. Founded in 2012, the company pitched itself as “the WeWork of co-living” and the largest global operator of the shared living concept, which rents furnished rooms in shared apartments to tenants.
Flush with funding, the company said in 2019 it was aiming to open 9,000 rooms with its building partners globally. As of last year, Quarters’ website said the company had 5,000 co-living rooms within its portfolio worldwide. The company now claims to be operating 3,000 rooms with 95 percent occupancy.
The eight Quarters properties owned by LLCs that filed for bankruptcy are located in New York City, Washington, D.C., Philadelphia and Chicago. It’s unclear how many tenants live in the eight buildings, but there are at least 449 rooms that are being rented out per Quarters’ website. In each building, Quarters leased the space from the building owner and then subleased the units to individual tenants, filings say.
In New York, there appear to be four properties Quarters was actively leasing through its website: 324 Grand Street in the Lower East Side; 629 East 5th Street in the East Village; 911 Jefferson Avenue in Bedford-Stuyvesant; and 186 North 6th Street in Williamsburg. Quarters’ D.C. building is fully leased up, according to its website, and while its West Loop building in Chicago was still looking for tenants as on Monday.
Two of the bankrupt properties had yet to begin leasing. One of them was located in Philadelphia, and the other was in the Brooklyn neighborhood of Clinton Hill at 251 DeKalb Avenue. At the height of the pandemic in New York, Quarters’ landlord at the DeKalb building sued the co-living company last spring for trying to terminate its 10-year lease to operate the property. The case is still ongoing.
Combined, the 10 LLCs estimate between $1 million and $5 million in liabilities and less than $500,000 in assets, according to the Chapter 7 filings.
Quarters did not return a request for comment. An attorney representing the company in its bankruptcy filings declined to comment.