Korman Communities and Prodigy Network Partner Up on Prime Real Estate: AKA United Nations.
In their second joint venture, Prodigy Network and Korman Communities have closed on AKA United Nations, located at 234 East 46th Street between 2nd and 3rd Avenues. The stated purchase price, according to Prodigy, was $68.5 million with over $10 million contributed via equity crowdfunding. The acquisition also included participation from Bank of America with senior financing and subordinate financing from Emmes & Co.
The equity crowdfunding round on Prodigy Network represents another significant success in their fast growing real estate portfolio. Investors, both US based and international participants, purchased equity in amounts starting at $50,000. This follows the recent success of another Prodigy Network project, AKA Wall Street. This is Prodigy Networks third project in New York City.
“Following the success of AKA Wall Street, our existing crowd of investors was quick to recognize the value associated with Korman Communities’ properties,” said Rodrigo Niño, CEO and founder of Prodigy Network. “The response of the crowd is far exceeding our expectations. The appetite for Manhattan commercial real estate is global. In less than a year we have closed three Manhattan projects with anticipated values exceeding $575 million.”
“We are very excited to expand our relationship with Prodigy Network in the recapitalization of AKA United Nations. The AKA platform continues to be the market leader in luxury furnished residences throughout the United States and we continue to look for opportunities to grow our portfolio,” said Bradley J. Korman, Co-Chief Executive Officer of Korman Communities. “Prodigy Network has proven to be the premier provider of crowdfunded equity and we are very proud of our partnerships together.”
The Midtown East location is at the heart of the United Nations Plaza district. The building is less than two blocks from the United Nations headquarters and three blocks away from Grand Central Terminal, one of the city’s main transportation hubs. The property is situated on a quiet residential street, and close to a number of museums, renowned restaurants, flagship retail destinations, and elite schools.
The existing 95-unit, 20-story property will undergo renovations to further enhance its luxury offerings and amenities and will include a furnished courtyard, lobby lounge, state-of-the-art health and fitness center, conference area with business services, private terraces and a 24-hour doorman. A luxury rooftop lounge featuring views of the Manhattan cityscape and East River will be added, with renovations expected to be complete in Spring 2015.
Developer Korman Communities is a well known operator that owns properties in New York City, Philadelphia, Beverly Hills, Washington, D.C., and London. Korman has constructed over 30,000 single-family homes and 12,000 apartments and townhouses
“The acquisition and crowdfunding of AKA UN is consistent with our strategy of investing in discrete institutional quality assets, which historically have been unavailable to smaller accredited investors,” said , Principal of Prodigy Capital Group, parent company of Prodigy Network. “With over $240 million of senior and subordinate debt provided by major money center banks and domestic pension funds it is clear that traditional institutional financing sources embrace crowdfunding.”
Prodigy Network was founded in 2003 and claims the largest investment crowdfunding project ever. The BD Bacata skyscraper in Bogota, Colombia raised over $170 million from many investors. In total Prodigy Network has led six international and U.S.-based crowdfunded projects, raising more than $300 million from 6,200 investors, and is currently developing projects globally with a projected value of more than $850 million.
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