The Daily Dirt: Commercial building and investors in distress

An analysis of New York's top real estate news

TRD New York /
Feb.February 26, 2020 02:58 PM
From left: 84 William Street, Rodrigo Niño and Larry Davis of Shorewood Property Group (Credit: Google Maps)

From left: 84 William Street, Rodrigo Niño and Larry Davis of Shorewood Property Group (Credit: Google Maps)

Investors in an extended-stay hotel received a strange letter: Cough up $40 million or potentially lose their entire investment.

It was the first communication that Prodigy investors had received in several months from the troubled crowdfunding firm. Investors were given a second option: Sell the hotel building by March 10, in which case, the proceeds would go toward paying off the property’s debt, Mary Diduch and Sylvia Varnham O’Regan report. The letter also warned — in bold and underlined capital letters — that if Prodigy is unable to refinance or extend its debt, investors faced a “significant likelihood that your investment will be lost in full.”

This is the second time in less than a year that Prodigy, which has faced a slew of legal and financial issues, has asked investors for more money. It stopped paying investor distributions last year across its portfolio, a move the company blamed on poor performance. Founder and CEO Rodrigo Niño stepped down in October.

“There’s a lot of doubt,” said an investor from Argentina who did not wish to be identified. “I cannot put money there, especially [because] there’s no confidence at all.”

Prodigy has apparently received at least five offers from potential buyers. The top bid is from Niido, which dangled $105 million.

CBRE plans to lay off more than three dozen employees in NYC.

According to a filing with the state’s Department of Labor, the firm plans to let go 40 employees. In the filing, the company attributed the layoffs to a “reduction in workload due to a change in business priorities,” Rich Bockmann reports.

The layoffs hit the company’s digital and technology group at 275 Seventh Avenue, which has 59 employees, according to a CBRE representative. Most of CBRE’s software and engineering work is being done out of the firm’s Dallas office, the representative said. The office also appears to include the 3D graphics startup Floored (now called CBRE Build), which CBRE acquired in 2017.

The layoffs are expected to begin May 22.

What we’re thinking about: What will become of the Two Bridges towers? Send a note to [email protected].

CLOSING TIME

Residential: The priciest residential closing recorded Tuesday was for a condo unit at 53 West 53rd Street in Midtown, at $11.9 million.

Commercial: The most expensive commercial closing of the day was for a healthcare facility at 119-19 Graham Court in Flushing, at $11 million.

BREAKING GROUND

The largest new building filing of the day was for a 347,517-square-foot residential building at 2080 Boston Road in College Point. Phipps Houses filed the permit application.

NEW TO THE MARKET

The priciest residential listing to hit the market was for a co-op unit at 781 Fifth Avenue in Lenox Hill, at $22 million. Jaar-mel Sloane has the listing.
— Research by Mary Diduch

A thing we’ve learned…

Starwood Property Trust’s Barry Sternlicht has some feelings about brick-and-mortar retail. During a fourth-quarter earnings call, he recounted a recent ill-fated search for size-medium shorts. The store was out of stock.

“Rents are lower, tenants have all the leverage,” he said. “And I would say the tenants themselves have done an incredibly shitty job running their stores.”

Thank you to Mary Diduch who reported this anecdote.

Elsewhere in New York

— Moles get “the strongest possible discipline.” NYPD Chief of Department Terence Monahan sent out an internal video warning officers against leaking information, photos or videos to the press, the New York Post reports. Presumably, the video was, uh, leaked.

The City found that unscrupulous lenders are still getting small businesses to sign away their legal rights in exchange for high-interest cash advances. That’s despite a law that bars these so-called confessions of judgment. The law only bars out-of-state lenders from inking such agreements with New York businesses, leaving the door wide open to in-state lenders.

— City Council minority leader Steven Matteo is the latest elected official to boycott Staten Island’s Saint Patrick’s Day parade, Politico New York reports. The Republican and others have decided against marching because of the organizers’ refusal to allow LBGT groups to march under their own banners.


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