Real Estate: A commentary on the impact of coronavirus

High rise buildings - commentary on impact of coronavirus to

In keeping with the overall economic downturn, the commercial real estate market has not been spared. The last two weeks saw a meaningful fall in transaction volume as sellers delayed bringing assets to the market, while borrowers did not seek refinancing unless under tight timing constraints due to imminent loan maturity. We expect this trend to continue until market conditions stabilize, albeit at a lower level.

While it’s too soon to understand what the longer-term effects will be, the shuttering of non-essential businesses and the reduction in travel has impacted every real estate asset type, but most markedly, the hotel and retail industry. While we see a short-term hit to the multifamily, office, and industrial assets due to business shutdowns and unemployment, we believe these asset types should show a quick recovery as life returns to normal. The shrinking number of new cases of coronavirus in China offers a glimmer of hope that the shutdown in the U.S. should be short-lived.

According to CBRE, following the events of 9/11 and the 2008 financial crisis, it took about two years for rents to go from peak to trough in each instance and then about six years to return to a pre-crash level. However, value recovered more quickly as cap rate compression due to falling inflation/interest rates made up for the slow recovery of rents. 

Residential apartments commentary on real estate asset class

We do not fully know the extent of the current downturn, however, given the market outlook, we expect an economic slowdown for at least the next few months with a slow recovery thereafter. We believe it’s prudent to take a step back and rethink our investment strategy. We’re constantly interfacing with market participants and keeping abreast of macro-economic factors to chase after deals that we believe can perform during a market slowdown.

Over the last few years, the lending market, in particular, has become extremely saturated and competitive. We saw very aggressive underwriting standards to justify the higher leverage loans that became commonplace throughout the market. In addition, the yields kept going down given the competition. The idea that such highly levered loans can perform over the long term was validated by one of the longest bull markets in history. As the economic climate changes, we’re seeing that such loans are on the brink of default and the lenders who had built up a portfolio of aggressive loans stand to face challenging times ahead. While some lenders have shut down shop or hit a pause due to uncertainty, the ones that are active are pursuing less risky deals, while yields have widened significantly across the board.     

In light of these developments, we’ve become more selective about the deals that we choose to close—ones that we believe can perform during a market slowdown. We’ve shifted our focus in terms of asset type to multifamily, office, and industrial, targeting core markets that have shown resilience in holding asset value over time. Additionally, we’re only pursuing low leverage loans with stringent loan covenants. We have increased our focus on portfolio management and continue to proactively interact with our origination partners/borrowers regarding potential issues. We will strive to work with our borrowers as issues arise by modifying loan structures to ensure capital preservation.

We believe the market will provide many opportunities for opportunistic investments which we are following closely. As always, we hope to be able to do higher-quality deals with higher yields and provide our investors with what we consider to be best-in-class investment opportunities.

How helpful is this content?

Share this article:

Sign up for Yieldstreet in 3 easy steps

Sign up with your email address

Securely verify your identity and link a bank account

Verify your accreditation (if applicable) to access all of Yieldstreet’s offerings.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.2B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest" or "Annualized Return" represents an annual target rate of interest or annualized target return and "term" represents the estimated term of the investment. Such target interest or target returns and estimated term are projections of the interest or returns and or term and may ultimately not be achieved. Actual interest or returns and term may be materially different from such projections. This targeted interest or returns and estimated term are based on the underlying investments held by the applicable.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including Dec 22th, 2021, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Prism Fund before investing. The prospectus for the Yieldstreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

300 Park Avenue 15th Floor, New York, NY 10022


No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

Banking services are provided by Evolve Bank & Trust, Member FDIC.

Investment advisory services are provided by YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure
Copyright © 2022 YieldStreet, Inc.