Nightingale’s acquisitions head exits in wake of crowdfunding scandal

Nightingale’s head of acquisitions headed for the door as his now-former company faces allegations of misappropriating funds tied to two large office investments.

Will Hutton posted on LinkedIn yesterday that he’s left the Elie Schwartz-led company. The post came after The Real Deal reported on Friday that an independent manager appointed by investors on the crowdfunding website CrowdStreet alleged that Nightingale had misappropriated tens of millions of dollars set aside for properties in Atlanta and Miami.

“After nearly eight years at Nightingale Properties, I am embarking on a new journey,” Hutton wrote on his profile. “Thank you for your understanding and continued support during this transition phase.”

Neither Hutton nor Nightingale responded to requests for comment.

Hutton, a native of Wichita, Kansas, joined Nightingale in 2016 as an analyst from Cohen Equities and worked his way up to director of acquisitions and capital markets, deploying more than $2 billion in equity along the way, according to his LinkedIn page.

During that period, the company did large deals such as the $328 million purchase of 1.7 million-square-foot Centre Square office complex in Philadelphia, the $909 million purchase (and subsequent flip) of the Coca-Cola building at 711 Fifth Avenue and the $395 million purchase of 111 Wall Street and the land underneath.

In 2019, Nightingale purchased a  82,000-square-foot newly built office building in Soho for about $125 million and inked a lease with Microsoft. A year later, during the pandemic, it bought the historic Whale Building in Brooklyn for $84 million from Madison Realty Capital.

In the past few months, Nightingale’s office properties have fallen into distress. The firm is facing foreclosures on the Whale Building, the Centre Square complex, and the Soho office building. 

The biggest controversy for the firm, however, has been two deals it funded through the crowdfunding platform CrowdStreet. The company raised $54 million to fund its planned purchase of the 1 million-square-foot Atlanta Financial Center, which it agreed to buy for $182 million last year.

The company also raised $9 million to invest in the 110,000-square-foot Lincoln Place office building at 1601 Washington Avenue in Miami Beach, which it bought in 2016 for $80 million. 

Neither deal closed. 

The entities set up for those investments filed for bankruptcy on Friday, and their accounts are essentially bare.

Anna Phillips, the independent manager representing investors, said on Friday that much of the money was transferred to Schwartz and his affiliates almost immediately after it was raised. 

“The bottom line is that the money that was raised by both entities has been misappropriated,” she said.

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