Medici Living Group CEO Gunther Schmidt and a Quarters living space
A German company is attempting to force its way into the ever-tightening co-living industry.
Medici Living Group raised $300 million as part of a joint venture with investment firm W5 Group to develop 1,500 units across the U.S. under its co-living brand, Quarters, the Berlin-based company said Tuesday.
The company is entering a crowded U.S. co-living industry, a concept developed about a decade ago to provide shared living spaces. Quarters, which currently has locations in New York, Chicago and Berlin, provides shared apartments, under terms similar to sublease agreements, that are maintained and offer amenities and services. Contracts can be as short as three months.
Co-living has been met with mixed reviews in different markets. Startup Common Living has a few locations in Brooklyn and announced it will open its first Manhattan location this year at an 11,000-square-foot space at 424 West 47th Street. The company, which has raised $63.4 million is partnering with YD Development for the Hell’s Kitchen development, dubbed Common Clinton.
Other co-living players include Ollie and British startup the Collective, which have raised $17 million and $450 million, respectively. The We Company, formerly WeWork, has also entered the space with the launch of its WeLive business in 2016. But the venture is struggling, and currently only two locations are open, one in New York, the other in Washington DC.
Despite this, Quarters has pitched itself as “the WeWork of co-living,” as it expands globally. Last month it announced that it had raised $1.14 billion for its co-living expansion in Europe. That investment was backed by Luxembourg-based CoreState Capital Group, which manages $28 billion in assets and is owned by Ralph White, the founder of W5 Group. W5 Group is also a shareholder in Medici Living Group.
Quarters currently has 1,800 rooms, but the company said the combined $1.4 billion in funding will enable it to open 9,000 rooms in the U.S. and Europe. This year it plans to enter Washington D.C., San Francisco, Los Angeles, Chicago, Boston, Philadelphia, Denver, Austin, Seattle and Miami. The company said the locations will be a combination of retrofits and new construction in cities with over 1 million people.
At a Quarters co-living location that opened in Chicago last April, apartments accommodate as many as five people, with a kitchen, one or more bathrooms and bedrooms sized between 77 to 198 square feet. Rents at the Fulton Market location, which has space for 175 residents, reportedly ranged from $1,200 per month, before utilities, wireless internet and Netflix subscription.
Source: The Real Deal Los Angeles