The auction announcement comes three weeks after Prodigy filed for Chapter 7 bankruptcy, and nearly a year after the crowdfunding network’s founder Rodrigo Niño died. The company is facing more than a dozen lawsuits filed by investors who reportedly poured more than $690 million into its investment platform.
A lawyer for Prodigy Network did not respond to a request for comment.
More than $50 million of equity for the Assemblage John Street development came from small-time investors who were lured by the promise of higher returns. According to the investor materials reviewed by The Real Deal, the project had struggled to break even for about a year after it opened in April 2018. The balance sheet finally turned positive in the second quarter of 2019, but income was still well below what was projected. The investor document cited oversupply in the local hotel market as part of the reason for the facility’s underwhelming performance.
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Real Estate Investment Platform Prodigy Network Hits Ch 7
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Larry Korman and Joe Lubeck (iStock)
A multifamily investment firm and a luxury hotel residences company have partnered to launch a $500 million hotel investment fund, seeking to take advantage of opportunities created by the pandemic.
Electra America Hospitality Group, a joint venture between Electra America and AKA, plans to focus on properties in New York City, Miami, Los Angeles, Washington D.C., Toronto and London, said Russ Urban, CEO of the new partnership. The joint venture recently closed on $100 million in capital.
“Anybody that’s selling a hotel in this environment today clearly is doing it for strategic liquidity issues,” Urban said. “But I wouldn’t say all of our sellers are distressed.”