About Time You Met: Reza Merchant, Founder of The CollectiveBy Angelica Malin
Read our exclusive Reza Merchant interview; Reza is the charismatic, charming CEO of co-living pioneers The Collective. He’s been hailed as the “king of co-living” and is now expanding the concept to the States, having raised around $250m from US investors.
The Collective has recently unveiled plans for its most ambitious project to date: a 705-room development in London’s Canary Wharf. Set to open in July 2019 and built from the ground-up, they are introducing flexible leases from a single night up to 12 months, creating a brand-new standard for the co-living sector. The Collective Canary Wharf, which spans 21 storeys and where rooms start from £1,300 per month, now becomes the world’s largest co-living space.
From a virtual reality golf simulator, to a multi-floor music venue quality immersive sound system, 9.2 surround sound cinema and dynamic mood lighting, members are in for a treat. It’s also home to east London’s highest swimming pool, with an adjoining bar offering soaring views of the London skyline, a spa which includes a sauna, gym, aerial silks studio and a mindfulness zone. Reza believes it’s the future of housing. Here’s why:
What is the concept behind The Collective?
Our mission at The Collective is to build and activate spaces that foster human connection and enable people to lead more fulfilling lives.
What inspired you to start the company?
When I was a student at the London School of Economics and had to find a place to live, I experienced first-hand how difficult it was to find any remotely decent and affordable accommodation in London. During this period I also had a very profound trip to Thailand, where I remember being inspired by how a random person on the street would smile and say hello when they walked past you, which was a stark contrast to London where you’d be considered strange if you did this, which highlighted how lonely and isolated big cities were becoming and the need to find ways to bring people together.
On day one we took out a £1600 overdraft and started a lettings agency with the objective of improving the service that students had when they were trying to find accommodation, which has evolved in time to The Collective.
As we have evolved, we have focused on creating environments where our members can lead more fulfilling lives grounded in experience and human connection. Seven years since we launched the first Collective building, we are proud to have announced our latest development in Canary Wharf that is evolving the co-living movement even further with a rich programme of events, state of the art facilities and the flexibility of nightly stays for the first time.
What is your message to young people entering the housing market?
There are poor and limited options provided by London’s rental market and a growing dissatisfaction with what is provided by landlords and traditional renting systems. We’ve been aware of this since we founded The Collective and have been acutely aware of a growing desire to live and rent in a different way. We are big believers in the idea that a home is about more than just four walls, and that where you live should facilitate your life and create a community that helps you live better and find fulfilment. We believe co-living can help you achieve this.
Should our generation still be aspiring to own property, or are we moving to an era of lifelong renting, including co-living?
We live in an increasingly global and mobile society, where we are citizens of the world rather than citizens of one country. It’s not that owning property isn’t an aspiration, it’s just become less of a priority for people who are looking prioritise personal growth and fulfilment over material possessions.
You have raised funding throughout your professional life. What has your experience of fundraising been and what advice would you give to other entrepreneurs going through the process?
We’ve been fortunate to have found many investors who believe in our vision, and we’ve had the opportunity to deliver on our commitments to them in terms of financial returns. My advice would be to find investors that buy into you and your vision, and ensure you enjoy spending time with them, as having a strong personal bond is essential to having a successful business relationship. Then its essential that you do whatever it takes to deliver on the commitments you make to your investors in order to build a reputation and track record, as this is what will unlock future funding. Also show through your actions that you’re willing to put your co** on the block for what you believe in.
You’re expanding into the US – which has a very different corporate culture, legal system and property market. How are you finding that expansion, and what should others with aspirations for overseas expansion be thing about?
Expanding to the US has been an amazing experience, in the last 9 months we’ve managed to acquire a pipeline of projects totalling over 2000 units and have raised around $250m from US-centric investors to finance this growth. The US has a highly entrepreneurial culture and things move very quickly here, so if you embrace the intensity and show conviction behind your vision, the pace of growth can far outstrip whats possible in Europe, and theres an amazing pool of talent to access, demonstrated by the amazing team that we’ve built here.
You’ve often mentioned in the same breath as We Work, a large corporate with deep pockets entering your area of the market. How do you view competition from a big titan and what advice would you give to the plethora of small companies coming up against bigger players?
Our purpose is to build and activate spaces that foster human connection and enable people to lead more fulfilling lives. If you think about the space we’re in, after food and water, a roof over someone’s head is the next biggest necessity. We also believe that every human being needs a strong sense of human connection in their lives, so we see space for plenty of people to do a great job and to build successful businesses in the space ultimately to create a positive impact for the world.
How do you respond to critics of the Collective, and more generally to challenges along the way of your business?
When you’re doing something that challenges the status quo and has never been done before you’re always going to have critics or people that don’t get the vision, if everyone did then the opportunity wouldn’t exist as it would already have been done! You’re also going to have challenges thrown your way every day because there isn’t a clearly defined path for how you get from A to B.
I also believe that we’re all responsible for and we can ultimately choose how we respond to any situation in life, no matter how bad it is. So if a tough challenge or obstacle arises, you can either let it get in your way, demotivate you and prevent you from achieving your goals or be an opportunity to learn, grow on a personal and professional level, improve the way you do things and use it as motivation to succeed.
I do my best to choose the second option.