Prodigy Network had a productive Friday. On the day it announced the purchase of 84 William Street for $60 million, the investor signed a contract for the purchase of 17 John Street for $85 million. It hopes to raise $66 million for 17 John Street through crowd funding from accredited investors – a target figure made possible by recent SEC rule changes. Both buildings are sold by Metro Loft.
Prodigy CEO Rodrigo Nino told the Real Estate Weekly that the purchase of 17 John Street will be finalized in May, and that no decision had been made on how exactly the building will be used. 84 William Street will be turned into a limited-stay apartment building in a joint venture with Korman Communities, Shorewood Real Estate Group LLC, and Nino said this was a possibility for 17 John Street as well. He added that Prodigy is currently in talks with Korman over the building.
Nino said he plans to renovate 17 John Street and add eight additional floors to the top for $90 million. On top of the $66 million form crowd funding, Nino hopes to get another $100 million from banks.
Prodigy Network has specialized in crowd funding developments in the U.S. and Colombia since 2009, using the technique to raise $25 million for the purchase of 84 William Street. But so far the company could only solicit funds from foreign investors due to SEC restrictions. On September 23, the SEC made crowd funding from accredited U.S. investors legal, and Nino said he expects his crowd funding in the U.S. to take off.
While 17 John Street is still in its early planning phase, 84 William Street is much farther along. The joint venture between Korman Communities, Shorewood Real Estate Group LLC and Prodigy Network plans to invest $40 million into the redevelopment of the building over the next 15 months, which would make it a $110 million investment overall. The building will become the newest branch of Korman’s upscale apartment brand AKA.
AKA Wall Street hopes to attract wealthy foreigners and professionals visiting the city who want the privacy and space of a condo, but the amenities of a hotel. The building currently houses a dorm for The New School, which will be moving out.
AKA offers furnished apartments with a kitchen, but also services such as a front desk. Guests can stay for a week, a month, or longer. It has locations in New York, Beverly Hills, Philadelphia, Washington D.C. and London. Korman said he hopes to add ten to twelve AKA locations worldwide in the near future, although he left open whether they would be pursued in partnership with Prodigy and Shorewood, or with other investors.
“AKA Wall Street marks our first venture in Downtown Manhattan and is part of our overall vision of expanding more within New York City. With all of the new development, luxury retailers and fine restaurants opening in the Financial District, we are confident in this market and found that there is a need for luxury long-stay accommodations here,” Brad Korman said in a statement. He added that the “light and air” that 84 William Street offers made the building particularly attractive.
Korman said he hopes to add four to six further AKA locations in Tribeca, Soho, Chelsea, the Meatpacking District and the Upper East Side.