Democratizing real estate investments.
By Irene Moore
Thousands of investors are buying into pieces of skyscrapers in order to share in revenues and property appreciation that used to be privy only to the super-rich. New-York-based Prodigy Network is helping to revolutionize the commercial real estate industry by bringing crowdfunding to real estate. Rodrigo Niño, Prodigy’s CEO and founder, says in The Real Deal, “I think the crowd should have access to projects that were privy to the guy writing $60-million checks before. Why not?”
For those in the dark about crowdfunding, instead of buying into a single fund or a pool of assets, people invest in a single asset. Niño explains the concept in a New York Times interview: “Essentially, crowdfunding means a single-asset real-estate fund that is open to accredited investors. It’s online equity syndication for one specific project on a real-estate basis. That would be the simplest way of putting it.”
After working as vice president of sales at the Miami brokerage firm Fortune International, Rodrigo Niño founded Prodigy Network in 2003 to connect a network of investors for the purpose of investing in prime, commercial real estate. It became legal in the U.S. in 2013 through the Jumpstart Our Business Startups (JOBS) Act, and it is only for accredited investors — by definition, those who have a net worth of $1 million, excluding their primary residence, or an income of $200,000 per year for the past two years. Niño says: “What we do is simple. It’s all about giving investors access to what we believe is the best real estate in the world.”
Niño, who trained in his native Colombia and studied economics in Switzerland, is a visionary who successfully funds projects of which crowdfunders would not normally dream. Through Prodigy’s secure investing portal, investors can buy into real estate assets and receive project updates, market reports, and financial statements for their investments via a personalized dashboard. Investors have the necessary tools and information to confidently make transactions and monitor their investments, online. “It lets them control the risk,” Niño says. ”It also allows international investors to invest in real estate in New York and in assets that actually make sense.”
In 2006, Niño moved Prodigy to Manhattan. In 2009, Spanish developer Emilio Borella approached him with plans to build the tallest skyscraper, Bd Bacatá, in Bogotá. Niño tapped into his network through crowdfunding — and about 3,100 investors kicked in $171.8 million of the $239 million needed to build the 66-story skyscraper.
In Manhattan, the $110-million AKA Wall Street, an extended-stay hotel with 140 furnished suites — a partnership between Prodigy Network, Korman Communities, and Shorewood Real Estate Group — just opened in June at 84 William Street in the Financial District. AKA Wall Street is attracting professionals who visit the city and want the privacy and space of a condo, but the amenities of a hotel.
“For AKA Wall Street, Prodigy raised $32 million, with a $250,000 minimum, which was brought down to $50,000. We got $72 million in financing from CIBC, a Canadian bank, and the rest in the form of mezzanine financing,” Niño says. In the New York Post, Bjorn Hanson — clinical professor at NYU’s Preston Robert Tisch Center for Hospitality and Tourism — says that extended-stay properties are in demand by visitors, but they also make financial sense for investors. And the returns that investors at AKA Wall can expect? “We’re expecting returns north of 15 percent to investors,” Niño says.
Brian Newman, VP of business development at Prodigy Network, says in the New York Post, “The superb location, the strong economic drivers, and the historic features of the property made this the ideal location for the newest AKA extended-stay hotel. The Financial District is one of the areas where we see continued growth. It is one of the most active neighborhoods in Manhattan.” Visitors say what they like about staying downtown is being able to walk around the neighborhoods, enjoy the sights, and experience the emerging hot dining scene without the crush of the tourists in Midtown.
Prodigy Network and Shorewood Real Estate Group are teaming up for yet another extended-stay property in the Financial District — the 106-suite, 18-story Assemblage at 17 John Street, which will open in 2017. “For 17 John Street, you could come in for as low as $10,000 if you were an American accredited investor,” Niño says. “It was really helpful because we got over 80 proposals from more than 22 countries.”
Coming down the pike, Prodigy is developing two more buildings that will combine short-term rentals and co-working space — The Assemblage/Park Avenue South, an existing 12-story building located at 329-331 Park Avenue South, and The Assemblage/25th Street, an existing 12-story building located at 114 East 25th Street. Get in now for your piece of the pie!