Prodigy Network Bets Big On Crowdfunding Commercial Real Estate

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By  | December 23, 2013

Rodrigo Nino ProdigyIn applying a loose definition of the term “crowdfunding,” Rodrigo Nino stands as the undisputed king of the emerging fundraising methodology. He and his team at Prodigy Network crowdfunded a building in Colombia to the tune of over $175 million from investors both in Colombia and the United States. If you asked me what the largest crowdfunding project was to date, I’d offer this example.

Prodigy Network makes use of exemptions under both Regulation D and Regulation S, which is available for “offers and sales of securities outside of the United States.” Among other functional benefits, Regulation S allows overseas issuers to offer debt and equity securities to US investors.

The $175 million building in Colombia, called BD Bacatá, will be the tallest building in Colombia when complete at 66 stories high. The 1.2 million square foot building will include office and retail space, apartments, and a 364-room hotel. It was funded thanks to contributions from over 3,000 investors in both the United States and Colombia.

View:  Real estates new frontier crowdfunding

“The disconnect was that the price tag of these assets was so high that it precluded investors with less than $100 million, for argument’s sake. What we do is we syndicate everything in smaller pieces and we enable the smaller investors to participate in these large commercial real estate assets.”Rodrigo Nino, Prodigy Network

It was Rodrigo Nino’s grand introduction to the world of crowdfunding. When Nino saw crowdfunding emerging as a means of accessing capital, he saw an opportunity to use crowdfunding as a way of matching smaller investors with large, commercial real estate assets.

Prodigy_Network_Real_Estate.JPG“I’ve been doing real estate for my entire career, and I realized how a lot of investors in the residential market were looking to buy with the idea of renting and betting on the future appreciation,” he told Crowdfund Insider. ”The asset class wasn’t really appropriate for that investment. It is time consuming, it is management intensive and the yields were low.

“On the other hand, we saw that the (US commercial real estate industry) is $16 trillion, and only 5% is held by REITs and private equity funds in real estate. the remainder – 95% – is held by large institutional investors and real estate families. So, we saw how those assets – hotels, extended stays, shopping malls, rentals – yielded very stable and predictable cash flows.

“The disconnect was that the price tag of these assets was so high that it precluded investors with less than $100 million, for argument’s sake. What we do is we syndicate everything in smaller pieces and we enable the smaller investors to participate in these large commercial real estate assets.”

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | Prezi or contact us at casano@ncfacanada.org.

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