Real estate crowdfunding platform Prodigy Network is launching its 5th equity crowdfunding offer to develop coworking spaces in Manhattan. The newest project, the Assemblage / Park Avenue South will seek a raise of $53 million from accredited investors. The term is expected to last 3 to 4 years with an IRR of 12% to 16%. Prodigy is one of the leaders in the real estate crowdfunding space having raised well over $150 million for US projects. Prodigy is unique in the fact that it is a developer on every listed project.
Prodigy explains that its financing model gives smaller investors the opportunity to participate in the development of an institutional-quality commercial project in New York City. The minimum investment on this most recent project is $50,000 but Prodigy expects solid double-digit returns.
“The most attractive aspect of real estate crowdfunding is to be able to democratize a valuable investment opportunity such as this one and to allow a whole community to benefit from it, not just a few, as it used to be until now,” said Prodigy Network founder and CEO Rodrigo Niño.
The funding for Assemblage / Park Avenue South will be allocated to the acquisition and renovation of a 37,000-square-foot property located at 329–331 Park Avenue South, in the middle of NoMad – a thriving Manhattan neighborhood. This are is said to conveniently connect to other important residential and business neighborhoods. NoMad is home to many notable restaurants as well as other leading companies in the city’s so-called technological boom.
The coworking spaces will provide flexible work environments and can be rented on a daily, weekly, or monthly basis. Members share a physical and virtual space as well as the equipment and services of a regular office. Prodigy states that this segment grew 85% globally between 2011 and 2015, mainly in highly competitive real estate markets like New York City. Coworking spaces in New York tend to be more attractive to tenants than traditional offices. This is due to the latter’s tight rental conditions (rental agreements are usually made for a minimum term of one year) and the high cost of traditional office rents (the average annual rent for a 300-square-foot office on Park Avenue in Manhattan is approximately U.S. $30,500 a year 1).
Prodigy’s Assemblage concept will offer a physical and virtual platform where member companies may benefit from a shared community, networking, and collaboration. The intent is to generate an environment that’s consistent with the undergoing transformation in the workforce, which is showing a surge in independent / virtual workers and entrepreneurs. Additionally, traditional corporations are hiring remote teams more and more frequently. This is especially relevant in the United States, where it’s estimated that 30% of the population works independently; this rate is expected to increase to 50% by 2020. Prodigy says this type of arrangement is particularly attractive to the millennial generation that has grown up highly connected and digitally sophisticated. The millennial generation makes up the largest segment of the US workforce estimated at 45 million with 1.6 million residing in New York
The Assemblage/Park Avenue South is Prodigy Network’s third collaborative workspace property in Manhattan. The company is currently finalizing the last phase of the crowdfunding campaign for The Assemblage/25th Street, also in NoMad, which is now in its pre-construction stage. Prodigy developed The Assemblage/17 John, which is located in the Financial District and is in the construction stage. Once these projects are completed, Assemblage members will have access to all of them.
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