Confined to Quarters

• Following the demise of BridgeStreet, one of the biggest names in the serviced apartment sector, late last year, now it is the turn of one of the highest profile companies in the coliving space to run in to trouble.

Quarters, the coliving brand of Berlin-based Medici Living had very ambitious expansion plans and raised a staggering amount of cash to fund them – $300 million for its push into the US in early 2019, and a €1 billion partnership with Corestate Capital for a growth plan in Europe, where it planned to reach 6,000 units under management.

I understand that the company started making redundancies in the US even before the major impact of the pandemic had been felt, and since then an ongoing legal battle with one of its New York landlords hasn’t helped matters. Last week it filed for Chapter 7 bankruptcy in the US.

In hindsight, Medici Living CEO Gunther Schmidt probably regrets saying that his intention was to create the “WeWork of coliving”, but in a way the Quarters trajectory is mirroring that of the flexible working giant, albeit at a smaller scale. Huge investment obviously brings with it the pressure to scale up quickly and this can lead to companies spreading themselves too thinly to cope with a market downturn, especially one of such an extraordinary nature as Covid-19.

WeWork has managed to trade through the crisis but only after major job losses and the scaling back of expansion plans.

Quarters says it will now “fully focus its efforts on its homebase in Europe with its locations in Germany and the Netherlands”.

Coliving and the future of work are just two of the subjects we’ll be covering in the second series of Urban Living webinars. Click here to see the full schedule and to register.