Failed startup’s Turtle Bay building sells at 90% discount

A 95-unit building at 234 East 46th Street traded for $69 million in 2014 and was valued at $125 million two years later. Now it’s been sold again — for a mere $13 million.

The Turtle Bay property’s rise and fall reflects that of the startup that once owned it.

Crowdfund investor Prodigy, which had a majority stake in the 20-story property, lost it through foreclosure after plans to redevelop it into a long-stay hotel with Korman Communities under its AKA brand never came to fruition and a $81 million refinance loan matured.

The sale of the building, to an anonymous limited liability company, is among the final chapters for Prodigy. Its founder, the late Rodrigo Niño, pioneered crowdfunding in the U.S. after regulatory changes in 2013, raising some $690 million from individual investors for real estate properties in New York and Chicago.

An investigation by The Real Deal later revealed misleading marketing, poor corporate governance and questionable investment strategies. Many Prodigy investors were overseas.

The company’s fortunes waned, and more than a dozen lawsuits from investors piled up. In 2021, a year after Niño’s death from cancer at the age of 50, it entered bankruptcy to liquidate its assets.

Prodigy’s New York lenders also took over the AKA Wall Street Hotel at 84 Williams Street and a co-working property at 17 John Street in the Financial District.

The Turtle Bay property’s $81 million loan, provided by Toronto-based Canadian Imperial Bank of Commerce in 2016, had replaced $12 million in funds contributed by more than 100 individual investors, TRD reported at the time.

The latest sale was the only investment sale in New York City between $10 million and $40 million recorded last week. 

On Tuesday, the telephone number for AKA at the building had been disconnected.