The Real Deal New York

Crowdfunder Prodigy to buy Ring portfolio buildings for $100M

MetroLoft paid Extell $76M for properties just six months ago

May 27, 2015 09:30AM
By E.B. Solomont


From left: Rodrigo Nino, 114 East 25th Street, 331 Park Avenue South and Nathan Berman

Real estate crowdfunding firm Prodigy Network is in contract to buy two former Ring portfolio buildings for $100 million, The Real Deal has learned. The deal comes less than six months after the Midtown South properties changed hands for a combined $76 million.

Prodigy is buying a 12-story building at 331 Park Avenue South for $51 million, including air rights from nearby properties, founder Rodrigo Nino said. The firm is also shelling out $49 million to buy 114 East 25th Street, a 42,000-square-foot loft-style property.

Earlier this year, developer MetroLoft bought the buildings for $39.5 million and $36.5 million, respectively, from Gary Barnett’s Extell Development. Extell took control of the famed F.M. Ring office building portfolio in October 2013, and has since sold off several properties, including Ring’s crown jewel at 212 Fifth Avenue, which is being converted to condominiums.

Nino said that under terms of the deal, MetroLoft, founded by Nathan Berman, will develop the portfolio to Prodigy’s specifications. Prodigy plans to take a page from WeWork’s playbook by developing shared workspace combined with short-term rental apartments. MetroLoft did not immediately comment.

“Seventy-five percent of the people that come to the collaborative workspaces are from out of town. Usually you lose them to nearby hotels,” Nino said. The buildings, along with Prodigy’s 17 John Street, will have a combined 330 units and 75,000 square feet of office space and restaurants, as TRD reported.

As for the crowdfunding component, Nino said Prodigy is looking to raise up to $20 million for 331 Park Avenue South, where the development costs will top $120 million. At 114 East 25th, Prodigy plans to raise $25 million toward development costs of $74 million.

Nino said the Park Avenue South property will have 100 apartments and 20,000 square feet of workspace, while the East 25th Street building will have 41 apartments and 25,000 square feet of workspace. The building at 17 John has 185 units and 30,000 square feet of workspace.

Membership in the shared workspace will range from $800 to $1,500 per month, Nino said, while rent for the apartments will be between $300 and $350 per night.

According to Nino, Prodigy’s principals invested $5 million as a deposit on each building and the firm will start crowdfunding the equity component of the capital stack in mid-July. “When we close on the property, we will release money from the crowd toward acquisition,” he said.