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Sep 7, 2015 6:01 PM ET

Archived: AKA United Nations launches

iCrowdNewswire - Sep 7, 2015

The first crowdfunding condos were just launched in Manhattan. AKA United Nations, located on East 46th Street had $12 million out of the $95 million of the project budget raised via crowdfunding. And it starts taking guests on September 10th.

Prodigy, the company behind the project, is now putting one-bedroom apartments for sale from $1.2 million to $1.5 million, with sizes varying between 562 and 662 square feet. Another group of apartments will be used as hotel. The expected return is between 19% and 23% per year.

Despite JOBS Act easing the process, most of the investors are from outside the US, mostly from Latin America, reports Bloomberg. Raising the amount through crowdfunding was not an easy task for Prodigy. The company was also questioned about its practices as there is no lack of institutional investors for buildings like this in New York.

The project confirms that crowdfunding has come to stay as a means of real estate investment. In China, malls are being built using the model. In Colombia, a whole skyscraper was completed using crowdfunding. In Malaysia, new regulations were passed to allow equity crowdfunding and some real estate projects are already being run. But in the US, large equity crowdfunding platforms are taking the scene and helping to connect accredited investors to interesting investment opportunities.

The investment on AKA United Nations was not small. The 116 backers had to pledge at least $20,000 each. That’s not a usual value for crowdfunding, even for equity type as there are some projects that accept investments as little as $100 from each backer.

The name of the project is related to its location, just one and a half block away from the United Nations building, one of the prime locations in Manhattan. Condos will be sold fully furnished. The company expects most buyers will be occasional visitors to the city who plan to rent their apartments for most of the time.

Via iCrowdNewswire
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