Troubled crowdfunding firm sells building at $10M loss
Downtown sale follows death of Prodigy Network founder Rodrigo Niño
Crowdfunding firm Prodigy Network has sold one of its commercial properties at a $10 million loss, creating further uncertainty for investors in the troubled firm.
The company sold 114 East 25th Street — where it operates the co-working space “The Assemblage” — for $41.3 million, property records show. Prodigy purchased the 12-story building for $51 million in 2016, borrowing $35 million. Investors in the building were required to put in a minimum of $50,000, according to Prodigy’s website.
Prodigy has been in financial strife for some time. The firm, which owns several commercial properties in New York City, stopped paying distributions to investors in late 2018, blaming poor performance. In an update sent to investors last year, Prodigy said the East 25th Street property was unable to meet its debt obligations.
In addition to its financial woes, Prodigy’s leadership is unclear. Rodrigo Niño, who founded the company as a crowdfunding firm in 2013, resigned last September as legal and financial troubles mounted. Soon afterward Niño informed investors that he had been diagnosed with cancer, and last month, after months of treatment in New York City, he died at the age of 50. A new CEO has still not been announced.
Prodigy’s chief financial officer, Carey Fieldcamp, and development partner, Larry Davis of Shorewood Real Estate Group, did not return phone calls seeking comment about the sale. Jeffrey Miller, a Uniondale-based attorney representing the LLC that bought 114 East 25th Street, also did not respond to messages.
The Assemblage, a co-working and event space that emphasizes wellness and community, has one other location in New York. The brand’s Twitter account was active Thursday, with a post advertising virtual sessions about “breathwork,” “dance waves” and “dissolving patterns of fear.”
A former real estate broker, Niño was a pioneer of crowdfunding who believed the model could open commercial real estate investing to ordinary people. Known for his energy and global network, he ended up raising some $690 million from investors around the world to fund commercial developments in New York, Chicago and his native Colombia.
But Niño’s visions for Prodigy — and projected returns — failed to meet expectations. When distributions stopped in late 2018, investors grew concerned about the health of the company, and several sued.
Early this year, they were offered some insight into what was going on behind the scenes when the company sent letters asking for money to keep two of its commercial buildings, 85 West Broadway and 84 William Street, afloat. The letters warned that if sufficient funds were not raised, the investors could lose everything they had put in.
But the letters did little to assuage the fears of those who already felt their money was at risk.
“There’s a lot of doubt,” one investor from Argentina told The Real Deal in February. “I cannot put money there … [because] there’s no confidence at all.”
Write to Sylvia Varnham O’Regan at email@example.com