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Investment Process
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The Assemblage

WHO IS PRODIGY NETWORK?

Focused primarily on prime commercial assets in Manhattan, Prodigy Network is democratizing real estate investing by giving smaller investors access to institutional quality investments previously privy to the very wealthy. Thanks to the JOBS Act, which regulated equity crowdfunding, Prodigy Network can now provide small and middle-sized investors from around the world access to these attractive investment opportunities.

Through this model, Prodigy Network has raised over $500 million from investors in 34 different countries and 27 US States. In addition to the “crowd”, Prodigy Network is able to leverage traditional financing from large institutions such as Deutsche Bank, Bank of America, and CIBC. The portfolio of 5 projects in Manhattan and 2 in Bogota has an estimated value of more than $800 million.

Prodigy Network initiated its track record in Manhattan through an extended stay property called AKA United Nations located on 234 E 46th Street. This was the first crowdfunded project in New York, generating double digit returns to its investors.

WHO IS RODRIGO NIÑO?

Rodrigo Nino is CEO and founder of Prodigy Network, and is revolutionizing both the commercial real estate and crowdfunding industries by being the first to meld the two worlds in the United States.

A Colombian native and a Manhattan resident, Nino has proven Prodigy Network’s crowdfunding model as an efficient and secure mechanism that enables individuals from around the world to invest in specific projects that were solely accessible to the very wealthy before.

Professor Karim Lakhani from Harvard Business School published a teaching case on Nino’s work titled, Prodigy Network: Democratizing Real Estate Design and Financing. Nino believes that crowdfunding will democratize commercial real estate by providing a new asset class for individuals, revolutionizing the industry.

Beyond commercial real estate, Nino believes the crowd can finance the solution of many of its own urban needs in cities for a profit. According to Nino, this shared value paradigm can level up the playing field for everyone. He sees "the World Economy evolving into a Crowd-Economy, where profit and positive impact are democratically lined up", thanks to technology and new legislation.

As proponent of the Crowd-Economy as the main tool against inequality, Nino has spoken at worldwide conferences and has been a noteworthy guest at NYU, MIT, Yale, Harvard University and the AEDES gallery in Berlin. Nino is often featured in leading publications, including The Wall Street Journal, Businessweek, Forbes, The Economist, The New York Times and Fast Company amongst others.

WHY NEW YORK?

According to research done by Real Capital Analytics, at the height of the financial crisis in 2007 and 2008, large institutional investors sought security in three main types of assets: gold, treasury bonds and commercial real estate in major US cities. This phenomenon, referred to as “Flight to Quality”, supported the prices of real estate assets located in the top ten cities in the United States, including New York City.

Rather than undergoing the major price corrections that were seen outside these cities, commercial real estate prices in the top ten U.S. cities saw little change as investors continued to invest in these locations.

For the reasons mentioned above, Prodigy intends to focus exclusively on real estate in major metropolitan cities. Currently, our affiliates' offerings are only in New York City. Our belief is that if institutional and ultra and high net worth investors look to New York City commercial real estate during downturns, then you should have access to it too.

HOW IS THE CROWDFUNDING MODEL STRUCTURED?

Our crowdfunding model offers investment opportunities in commercial real estate, through our online platform, and is structured through a main investment fund and two subordinated funds (one domestic and one international), which issue each offering. Investors are involved in the funds which in turn are the owners of the underlying assets or in other words, the building itself. The money raised from the investor portion of the fund is held in a custody account operated by a third-party fund manager, NES Financial. When fundraising is complete, they are released from the custody account and are invested in the acquisition and development of the project.

Our business can design in 5 phases:

  1. Asset search process and debt diligence,
  2. Business structuring,
  3. Collection of funds through the collective investment model,
  4. Construction,
  5. Settlement of investment and Delivery of returns.

To date our strategic partner, Shorewood Real Estate Group has been in charge of phases 1, 2 and 4 of the business, collaborating with developers, operators and other recognized institutions.

WHAT TYPES OF REAL ESTATE DOES PRODIGY NETWORK OFFER?

Prodigy offers access to a variety of property types located in major cities like New York City, including multi-family, office, retail and hospitality. Prodigy Network has a small portfolio in Colombia but it’s important to know that our projects in Colombia are only offered to Colombian nationals in order to protect foreign investors from currency or country risk.

HOW DO YOU SELECT THE LOCATION FOR THE PROPERTIES?

We choose properties in attractive and growing neighborhoods, with a variety of commercial and office space. Additionally, we believe it's important that the locations chosen are well connected, with various access routes and different transportation choices closeby.

WHAT ARE PRODIGY NETWORK'S PROJECTS IN COLOMBIA?

Prodigy Network’s Colombia portfolio consists of Exe 95 and ABH, two mixed use projects, crowdfunded and co-developed by Prodigy Network. Not included in this figure is BD Bacatá, a mixed-use project in Bogota, developed by BD Promotores, for which Prodigy Network ran the crowdfunding campaign and raised approximately US$190 million and deposited this amount in the entity called Acción Fiduciaria. Prodigy Network’s projects in Colombia are only offered to Colombian nationals in order to protect foreign investors from currency or country risk. Any reference to Prodigy Network’s fundraising efforts in other countries refers to fundraising allocated to the projects offered by Prodigy Network in Manhattan.

TOTAL NUMBER OF INVESTORS

We have more than 6,500 investors in 34 countries and 26 states in the US who have participated with more than US $500 million in our buildings.

CAN I FUND MY PROJECT THROUGH THE PRODIGY NETWORK PLATFORM?

At Prodigy Network we are constantly analyzing new projects in New York City, as well as other cities in the United States and the world. If you have a project that you would funding for, please email us at:projects@prodigynetwork.com

HOW DO YOU INVEST?

You can complete the investment process directly through our website. Having registered, you now have access to the portfolio of investment opportunities where you can read about each opportunity and decide which investment is right for you. You can contact us if you have any questions at investorrelations@prodigynetwork.com.

When you decide on investing, you can follow the investment process directly from your dashboard, which requires answering a questionnaire on contact details and banking information.

After reserving your investment, this will be reviewed by our Contract Administration Department and our third-party Fund Administrator and any additional information will be requested from you as necessary. Once complete, and assuming your investment meets our criteria, your investment will be approved and the transaction will occur with the payment information given in the process.

WHAT SUPPORTING DOCUMENTS SHOULD I PRESENT FOR MY INVESTMENT?

If you are a U.S. investor:

  • A copy of a valid government issued Photo I.D. (Drivers’ License or Passport).
  • Proof of Accreditation

If you are a Non U.S. investor:

  • A copy of a valid government issued Passport.
  • A copy of a utility bill, or other valid proof of residence (as proof of address) in the name of the investor and dated not older than 3 months.
  • A copy of a Bank Statement or Bank Reference Letter dated not older than 3 months to verify account owner.

WHY DO I NEED TO SHOW A COPY OF A UTILITY BILL?

This serves as a proof of address, confirming the country you are located in and investing from.

WHY MUST I SHOW A COPY OF MY BANK ACCOUNT STATEMENT?

This document gives us the proof of funds for the investment.

WHAT IS THE INVESTMENT TIME HORIZON?

The timing of each investment varies widely depending on the type of property and the underlying investment strategy.

HOW LONG DOES IT TAKE TO INVEST?

After registering for the website, registered users can view investment opportunities and subscribe to invest online relatively quickly.

DOES PRODIGY NETWORK PROVIDE INVESTMENT ADVICE?

No. We do not make any recommendations, solicit any offers to buy or sell any securities, or provide any investment advice.

HOW ARE INVESTMENT STRUCTURED?

Prodigy structures each investment for both U.S. investors and international investors. The details for each investment opportunity are explained in depth in each investment’s offering documents.

WHAT TYPES OF PARTNERS DOES PRODIGY NETWORK WORK WITH?

Prodigy partners with experienced developers and operators in an effort to generate as much value as possible for each of its investment opportunities. A few of the companies we work with are:

  • Shorewood Real Estate Group
  • AKA
  • Metroloft
  • Meyer Davis
  • Bank of America
  • Canadian Imperial Bank of Commerce
  • Deutsche Bank
  • Arbor Bank

WHAT REPORTING IS REQUIRED?

Prodigy has no required reporting obligations, but we seek to provide you with up to date information on each of your investments. This is done through the client dashboard where investors receive periodic financial statements, typically semi-annually, and investment updates including photos and videos of the project’s status. More information on project reporting can be found in the offering documents for each investment.

WHO INTERACTS WITH INVESTORS?

The support team at Prodigy Network and our third-party Fund Administrator provide information to investors to keep them up to date with their investments. Information is provided through the client dashboard and email. If investors have questions during the investment process they are assigned to a client relations associate that can answer them.

HOW DO INVESTORS TRANSFER FUNDS TO THE ISSUERS?

Investors can choose between standard ACH transfers and wire transfers depending on the amount invested. All funds are handled by a third party escrow agent, as directed by the fund administrator in accordance with the transaction documents, to ensure that capital is properly transferred from the investor to the issuer.

WHAT IS RULE 506?

Our affiliates currently offer investments as private placements in reliance on Rule 506 under the Securities Act of 1933, as amended (the "Securities Act"). Rule 506 exempts the offer and sale of such investments from registration under Section 5 of the Securities Act provided that the conditions of Rule 506(b) or (c) are met.

The general conditions under both rules are that all sales that are part of the same offering meet the terms and conditions of Rule 506 and that the issuer of the securities exercises reasonable care to assure that the purchasers of the securities are not “underwriters” under the Securities Act. So long as offers and sales are to accredited investors only, the only difference between Rule 506(b) and Rule 506(c) is that the former prohibits general solicitation and advertising, while the latter allows it. The tradeoff is that accredited investors must be reasonably verified under Rule 506(c), whereas self-certification of accredited investor status alone is sufficient under Rule 506(b). An issuer is deemed to take reasonable steps to verify accredited investor status if the issuer does not have knowledge that a purchaser is not an accredited investor and the issuer uses one of the non-exclusive methods of verification set forth in Rule 506(c). These include reviewing the purchaser’s tax returns, account statements and/or credit reports or obtaining written confirmation as to accredited investor status from a broker-dealer, investment adviser, attorney or certified public accountant.

WHAT IS REGULATION S?

Our affiliates currently offer investment opportunities to persons outside the United States under an exclusion from the registration requirements of Section 5 of the Securities Act known as Regulation S. These offerings are only made available where the offer or sale of securities is made in an “offshore transaction” and where there are no "directed selling efforts" in the United States. Depending on the nature of the offering, other conditions may also apply.

CAN YOU RESELL YOUR SECURITIES?

Securities acquired in a transaction through our platform are "restricted securities" (as defined in Rule 144(a)(3) of the Securities Act) and cannot be resold without registration under the Securities Act or an applicable exemption therefrom. There is no public market for the resale of securities purchased through our platform and we do not expect that one will develop in the foreseeable future. Each registered User is required by our Terms of Service to represent and warrant that he or she will not invest in any securities through our platform with a view to their distribution. Investors should expect that any securities purchased through our platform will be illiquid.

WHERE IS THE ESCROW ACCOUNT LOCATED?

The escrow accounts are located in the Cayman Islands and in the United States. We use trusted custodial banks such as JP Morgan Chase, SunTrust and EFG.

WHO SUPERVISES PRODIGY NETWORK´S INVESTMENTS?

Prodigy Network has a third-party fund administrator, NES Financial, who manages the funds of each project. When certain milestones are reached in the fundraising process, funds are released and invested in the acquisition and development of the project.

Additionally, each project is audited by Marcum LLP, PWC and Citibank UK, offering additional security to investors.

WHAT RETURNS SHOULD I EXPECT?

Returns cannot be guaranteed. We and our affiliates can only project potential returns based on certain assumptions as well as the due diligence we and our affiliates conduct prior to purchasing a property. Each investor is required to acknowledge in our Terms of Service that investments that derive their value from real estate involve substantial risks, that such investments are not appropriate for all investors, that there can be no assurance that the investment objectives for any particular investments will be met, and that investors must be able to bear an entire loss of their investment.

WHAT ARE THE POTENTIAL RISKS INVOLVED?

Investing in real estate is risky and is often speculative in nature. Some of the different risks associated are:

  • Development delays
  • Increase in costs
  • Change in market Conditions
  • Operation

WHAT FEES DOES PRODIGY NETWORK CHARGE?

Prodigy Network’s affiliate issuers charge fees for the services they provide on behalf of investors. These fees include, but are not limited to the following:

For development projects:

  • Development Fee: 3% of total project cost
  • Asset Management Fee: 2% of equity per annum (1% paid semi-annually until property is sold
  • Financing Fee: 1% of debt

For other projects:

  • Acquisition Fee: 2% of Purchase Price
  • Asset Management Fee: 2% of equity per annum (1% paid semi-annually until property is sold)
  • Financing Fee: 1% of debt

Other fees and expenses are incurred for each project and are explained in detail in the offering documents for each investment opportunity. All fees and expenses are included in the financial projections provided by Prodigy Network and/or its affiliated issuers.

WHAT SECURITY DO YOU HAVE FOR EACH INVESTMENT?

Each investment offered through Prodigy Network is secured by the issuers’ equity interests, direct or indirect, in the underlying real estate. Prior to acquiring a property, investors’ contributions are held in escrow until the issuer has raised enough capital to close on the property. This ensures that your investment is always secured by the actual real estate that you’re investing in.

ARE THE INVESTMENTS OFFERED BY PRODIGY NETWORK LEVERAGED?

Investments offered through Prodigy often utilize varying degrees of leverage that is senior to the equity interests of the issuer. The amount of leverage and resulting risks associated with such leverage are disclosed in the offering documents for each investment and should be carefully read prior to making an investment decision.

WHY DEVELOP COWORKING SPACES IN NEW YORK?

Being one of the most dynamic cities of the world, New York offers a steady flow of solopreneurs, entrepreneurs, and creative individuals that come from different parts of the world and need work and living spaces.

Coworking spaces are the ideal alternative. Albeit New York already has a variety of spaces catering to the coworking demand, no brand promotes a community of persons focused on aligning social impact with economic benefits, making The Assemblage is the ideal space for them.

WHO IS GOING TO MANAGE THE ASSEMBLAGE PROPERTIES?

The operation of the different properties will be done jointly by Kokua, an independent hotel management firm, and The Assemblage. Kokua is a company that has over 10 years of experience in the hospitality sector, and has worked with Starwood, Hilton, Marriott, IHG and Radisson. The Assemblage, Prodigy Network’s coworking and coliving brand has a core management team of experts, coming from highly recognized brands that we deeply admire, such as Soho House or NeueHouse, who bring their background in coworking and community building.

WHAT'S THE DIFFERENCE BETWEEN THE ASSEMBLAGE AND OTHER EXISTING COWORKING SPACES?

The Assemblage will differentiate itself from other coworking spaces by focusing on creating a global community of persons interested in developing projects that align social impact with economic benefits.

Additionally, The Assemblage will offer excellent locations, high-quality design in each property and a unique concept that integrates coworking and coliving uses, social spaces, and event and restaurant spaces, all under the same roof.

WHAT IS THE ASSEMBLAGE'S BUSINESS MODEL?

The Assemblage will operate coworking spaces in its three properties in Manhattan, offering three types of memberships to its users. Some of these properties will have retails spaces that will generate additional revenue.

Lastly, The Assemblage / 17 John will have short-term rentals operated jointly by Kokua and The Assemblage, integrating the coliving component of the brand.

HOW MANY TYPES OF MEMBERSHIP WILL THE ASSEMBLAGE OFFER?

The Assemblage will have five different memberships that vary in cost and benefit:

  • Assembly
  • House
  • Resident Desk
  • Resident Office
  • Resident Lounge